-----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, EGRB7Fw5sZoF9trPaE/CNKqfLqkIVa6kn98UiW7ZnT5wBxxQILtOTLubUOZo2JSq ksmrjp8qK4dPuJixjYuq0w== 0000891554-96-000524.txt : 19960816 0000891554-96-000524.hdr.sgml : 19960816 ACCESSION NUMBER: 0000891554-96-000524 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WITCO CORP CENTRAL INDEX KEY: 0000107889 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 131870000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04654 FILM NUMBER: 96614358 BUSINESS ADDRESS: STREET 1: ONE AMERICAN WAY CITY: GREENWICH STATE: CT ZIP: 06831 BUSINESS PHONE: 2126053800 MAIL ADDRESS: STREET 1: ONE AMERICAN LANE CITY: GREENWICH STATE: CT ZIP: 06831 FORMER COMPANY: FORMER CONFORMED NAME: WITCO CHEMICAL CORP DATE OF NAME CHANGE: 19851117 FORMER COMPANY: FORMER CONFORMED NAME: WITCO CHEMICAL CO INC DATE OF NAME CHANGE: 19681203 10-Q 1 QUARTERLY PERIOD ENDED JUNE 30, 1996 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 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 1-4654 WITCO CORPORATION (Exact name of registrant as specified in its charter) Delaware 13-1870000 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One American Lane, Greenwich, Connecticut 06831-2559 (Address of principal executive offices) (Zip Code) (203) 552-2000 (Registrant's telephone number, including area code) 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 ----- ----- The number of shares of common stock outstanding is as follows: Class Outstanding at July 31, 1996 ----- ---------------------------- Common Stock - $5 par value 56,649,410 WITCO CORPORATION FORM 10-Q For the quarterly period ended June 30, 1996 CONTENTS PAGE -------- ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed consolidated balance sheets at June 30, 1996 (unaudited) and December 31, 1995 2 Condensed consolidated statements of operations (unaudited) for the three and six months ended June 30, 1996 and 1995 3 Condensed consolidated statements of cash flows (unaudited) for the six months ended June 30, 1996 and 1995 4 Notes to condensed consolidated financial statements (unaudited) 5 Independent accountants' report on review of interim financial information 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II. OTHER INFORMATION Item 1. Legal Proceedings 14 Item 4. Submission of Matters to a Vote of Security Holders 15 Item 6. Exhibits and Reports on Form 8-K 16 Signatures 17 Index of Exhibits 18 PART I.FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS WITCO CORPORATION AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands Except Per Share Data)
June 30, December 31, 1996 1995 (a) ------------------------ ------------------------ (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 119,652 $ 143,994 Accounts and notes receivable-net 425,460 406,486 Inventories Raw materials and supplies $115,195 $115,231 Finished goods 209,337 324,532 207,667 322,898 -------- -------- Prepaid and other current assets 70,007 70,667 ---------- ---------- TOTAL CURRENT ASSETS 939,651 944,045 ---------- ---------- PROPERTY, PLANT, AND EQUIPMENT - less accumulated depreciation of $634,349 and $586,595 797,898 811,667 GOODWILL AND OTHER INTANGIBLE ASSETS - less accumulated amortization of $78,313 and $62,450 715,612 728,124 OTHER ASSETS 125,560 118,182 NET ASSETS OF DISCONTINUED OPERATIONS 171,293 170,426 ---------- ---------- TOTAL ASSETS $2,750,014 $2,772,444 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes and loans payable $ 308,857 $ 309,171 Accounts payable and other current liabilities 439,644 385,294 ---------- ---------- TOTAL CURRENT LIABILITIES 748,501 694,465 ---------- ---------- LONG-TERM DEBT 678,907 683,830 DEFERRED INCOME TAXES 61,860 87,532 DEFERRED CREDITS AND OTHER LIABILITIES 311,374 302,500 SHAREHOLDERS' EQUITY $2.65 Cumulative Convertible Preferred Stock, par value $1 per share Authorized - 14 shares Issued and outstanding - 7 shares 7 7 Common Stock, par value $5 per share Authorized - 100,000 shares Issued and outstanding - 56,649 shares and 56,435 shares 283,247 282,173 Capital in excess of par value 135,934 131,076 Equity adjustments: Foreign currency translation 13,029 17,222 Pensions (5,884) (4,898) Retained earnings 523,039 578,537 ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 949,372 1,004,117 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,750,014 $2,772,444 ========== ==========
(a) The balance sheet at December 31, 1995, has been derived from the audited financial statements at that date. See accompanying notes. 2 WITCO CORPORATION AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, -------------------------- -------------------------- (In thousands except per share data) 1996 1995 1996 1995 ----------- ----------- ----------- ----------- Net Sales $ 571,458 $ 489,231 $ 1,160,883 $ 1,007,183 Cost of Goods Sold 434,680 390,634 883,025 795,847 ----------- ----------- ----------- ----------- Gross Profit 136,778 98,597 277,858 211,336 Operating Expenses Selling expense 28,588 18,898 55,707 38,836 General and administrative expenses 36,480 27,712 71,907 58,151 Research and development 18,037 12,633 36,026 25,076 Other expenses (income) - net 5,507 (79,477) 6,788 (84,323) ----------- ----------- ----------- ----------- Total Operating Expenses 88,612 (20,234) 170,428 37,740 ----------- ----------- ----------- ----------- Operating Income from Continuing Operations 48,166 118,831 107,430 173,596 Other Expense (Income) - Net Interest expense 17,724 8,294 35,393 16,744 Interest income (2,403) (3,208) (4,871) (6,130) Other expense - net 901 671 1,874 1,877 ----------- ----------- ----------- ----------- Income from Continuing Operations before Income Taxes 31,944 113,074 75,034 161,105 Income Taxes 13,425 44,053 30,934 61,814 ----------- ----------- ----------- ----------- Income from Continuing Operations 18,519 69,021 44,100 99,291 Discontinued Operations: Income from Discontinued Operations - Net of Income Taxes of $ -, $1,412, $283, and $1,298 -- 2,333 340 1,838 Estimated Loss on Disposal - Net of Income Tax Benefit of $43,612 (68,253) -- (68,253) -- ----------- ----------- ----------- ----------- Income (Loss) from Discontinued Operations (68,253) 2,333 (67,913) 1,838 ----------- ----------- ----------- ----------- Net Income (Loss) $ (49,734) $ 71,354 $ (23,813) $ 101,129 =========== =========== =========== =========== PER COMMON SHARE: PRIMARY Income from continuing operations $ .33 $ 1.22 $ .77 $ 1.76 Discontinued operations: Income from discontinued operations - net of income taxes -- .04 .01 .03 Estimated loss on disposal - net of income tax benefit (1.20) -- (1.20) -- ----------- ----------- ----------- ----------- Net Income (Loss) $ (.87) $ 1.26 $ (.42) $ 1.79 =========== =========== =========== =========== PER COMMON SHARE: FULLY DILUTED Income from continuing operations $ .32 $ 1.22 $ .77 $ 1.76 Discontinued operations: Income from discontinued operations - net of income taxes -- .04 -- .03 Estimated loss on disposal - net of income tax benefit (1.19) -- (1.19) -- ----------- ----------- ----------- ----------- Net Income (Loss) $ (.87) $ 1.26 $ (.42) $ 1.79 =========== =========== =========== =========== Weighted average number of common shares and equivalents - primary 56,990 56,460 56,943 56,410 =========== =========== =========== =========== Dividends declared $ .28 $ .28 $ .56 $ .56 =========== =========== =========== ===========
See accompanying notes. 3 WITCO CORPORATION AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended June 30, ---------------------- 1996 1995 --------- --------- (In Thousands) NET CASH PROVIDED BY OPERATING ACTIVITIES $ 74,485 $ 25,329 --------- --------- INVESTING ACTIVITIES Expenditures for property, plant, and equipment (77,910) (49,070) Proceeds from dispositions 13,650 146,026 Other investing activities (2,521) (1,824) --------- --------- Net Cash Provided by (Used in) Investing Activities (66,781) 95,132 --------- --------- FINANCING ACTIVITIES Proceeds from borrowings 303,831 3 Payments on borrowings (306,698) (703) Dividends paid (31,643) (31,459) Other financing activities 5,014 3,653 --------- --------- Net Cash Used in Financing Activities (29,496) (28,506) --------- --------- Effects of Exchange Rate Changes on Cash and Cash Equivalents (2,550) 10,890 --------- --------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (24,342) 102,845 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 143,994 197,173 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 119,652 $ 300,018 ========= =========
See accompanying notes. 4 WITCO CORPORATION AND SUBSIDIARY COMPANIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A - Basis of Preparation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the three and six month periods ended June 30, 1996, are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. For further information, refer to the consolidated financial statements and footnotes thereto included in the company's annual report on Form 10-K for the year ended December 31, 1995. The condensed consolidated financial statements at June 30, 1996, and for the three and six month periods ended June 30, 1996 and 1995, have been reviewed in accordance with standards established by the American Institute of Certified Public Accountants, by independent accountants Ernst & Young LLP, and their report is included herein. NOTE B - Statement of Operations Reclassifications Effective January 1, 1996, the company made the following revisions to its statement of operations format: o Depreciation expense is included in cost of goods sold, general and administrative expenses, selling expense and research and development. Amortization expense is included in other expenses (income) - net. Depreciation and amortization was previously classified separately. o Research and development, previously included in cost of goods sold, is now classified separately. o State income taxes, previously included in cost of goods sold, and other expenses (income)-net are now classified as income taxes. The condensed consolidated statement of operations for the three and six month periods ended June 30, 1995 have been reclassified for these changes. NOTE C - Discontinued Operations On September 11, 1995, the company announced its intention to divest its Lubricants Group. These operations are reflected as discontinued operations for all periods presented in the company's statements of operations and as net assets of discontinued operations in the company's balance sheets. Total revenues for the three and six month periods ended June 30, 1996 and 1995 were $92,036,000 and $179,215,000, and $97,444,000 and $181,943,000 respectively. The results of these operations were impacted in the second quarter and the six months ended June 30, 1996 by an after tax charge of $68,253,000, or $1.20 per common share, associated with the divestiture of the Lubricants Group. The charge is based upon recent events and information which resulted in management's current estimate of the net realizable value of the Lubricants Group. This latest estimate is based upon contract negotiations, lower than anticipated bids for portions of the group and amendments to the company's plan of disposal, including plant closures, which resulted in a writedown of certain assets and a provision for associated costs. The divestiture of the Lubricants Group is expected to be completed by year-end. 5 NOTE C - Discontinued Operations (continued) A summary of net assets of discontinued operations for the periods ended June 30, 1996 and December 31, 1995 are as follows:
June 30, December 31, In Thousands 1996 1995 - ------------ --------- --------- Accounts and notes receivable - net $ 58,339 $ 61,633 Inventories - net of LIFO reserve of $32,188 and $27,823 43,652 38,378 Property, plant, and equipment - net 67,870 112,639 Accounts payable and other current liabilities (3,065) (39,603) Other assets and liabilities - net 4,497 (2,621) --------- --------- Net assets of discontinued operations $ 171,293 $ 170,426 ========= =========
Additional liabilities of the Lubricants Group are included in "Accounts payable and other current liabilities" ($66,853,000) and "Deferred credits and other liabilities" ($48,426,000) as of June 30, l996. On August 1, 1996, the company entered into an agreement to sell certain assets of the Kendall/Amalie unit of the Lubricants Group. The terms of the agreement are consistent with the company's amended plan of disposal. NOTE D - Other Matters At December 31, 1995, the company had $605 million of bank loans outstanding under a credit agreement with a consortium of banks. On February 12, 1996, the company issued $150 million of 6.125% Notes due 2006 and $150 million of 6.875% Debentures due 2026. The net proceeds of $297 million, plus cash on hand, were used to repay $300 million of bank loans under the credit agreement. Immediately thereafter, the availability under the credit agreement, as amended, was reduced to $375 million of which $305 million was utilized at June 30, 1996. The statements of operations for the three and six month periods ended June 30, 1995 include a gain of $27,073,000, or $.48 per common share, from the sale of the company's Carbon Black business. The pre-tax gain of $44,547,000 is included in the caption "Operating Expenses - Other expenses (income) - net". The statements of operations for the three and six month periods ended June 30, 1995 include a gain of $23,032,000, or $.40 per common share, as a result of settlements with certain of the company's insurers, net of related legal and other costs. The pre-tax gain of $37,696,000 is included in the caption "Operating Expenses - Other expenses (income) - net". The statement of operations for the six month period ended June 30, 1995, includes a gain of $5,918,000 or $.11 per common share, from the sale of the company's Battery Parts business. The pre-tax gain of $9,532,000 is included in the caption "Operating Expenses - Other expenses (income) - net". NOTE E - Effective Tax Rate The effective tax rates of 42% and 41.2% for the three and six month periods ended June 30, 1996, as compared to the statutory tax rate of 35%, are primarily the result of state income taxes and goodwill amortization related to OSi Specialties, Inc., which is not deductible for income tax purposes. The effective tax rates of 39% and 38.4% for the three and six month periods ended June 30, l995, as compared to the statutory tax rate of 35%, are primarily the result of state income taxes. NOTE F - Litigation and Environmental The company has been notified that it is a potentially responsible party ("PRP") or a defendant in a number of governmental (federal, state and local) and private actions associated with the release, or suspected release, of contaminants into the environment. As a PRP, the company may be liable for costs associated with the investigation and remediation of environmental contamination, as well as various penalties, and damages to persons, property and natural resources. As of June 30, 1996, the company was a PRP, or a defendant, in connection with 67 sites at which it is likely to incur costs associated with environmental investigation or remedial 6 NOTE F - Litigation and Environmental (continued) actions which have been or will be executed pursuant to the federal Comprehensive Environmental Response Compensation and Liability Act ("CERCLA"), the federal Resource Conservation and Recovery Act ("RCRA") or similar state or local laws. With 21 exceptions, all of these sites involve one or more other PRPs and in most cases there are numerous other PRPs in addition to the company. CERCLA, RCRA and the state counterparts to these federal laws authorize governments to investigate and remediate actual or suspected damage to the environment caused by the release, or suspected release, of hazardous substances into the environment, or to order the responsible parties to investigate and/or remediate such environmental damage. The company evaluates and reviews environmental reserves for future remediation and other costs on a quarterly basis to determine appropriate reserve amounts. Inherent in this process are considerable uncertainties which affect the company's ability to estimate the ultimate costs of remediation efforts. Such uncertainties include the nature and extent of contamination at each site, evolving governmental standards regarding remediation requirements, changes in environmental regulations, widely varying costs of alternative cleanup methods, the number and financial condition of other potentially responsible parties at multi-party sites, innovations in remediation and restoration technology, and the identification of additional environmental sites. At June 30, 1996, the company's reserves for environmental remediation and compliance costs (including $66,635,000 of both current and long-term environmental liabilities from the Lubricants Group) amounted to $145,286,000, reflecting the company's estimate of the costs to be incurred over an extended period of time in respect of those matters which are reasonably estimable. The change in the company's environmental reserves from December 31, l995 was primarily the result of the company's amended plan of disposal. The company is a defendant in six similar actions arising out of the company's involvement in the polybutylene resin manufacturing business in the 1970's. Five of the following cases are currently pending in California state courts and one is pending in Texas state court: East Bay Municipal Utility District v. Mobil Oil Corporation, et al., filed in November 1993, and pending in Superior Court for the County of San Mateo, California; City of Santa Maria v. Shell Oil Company, et al., filed in May 1994, and pending in Superior Court for the County of San Luis Obispo, California; Nipomo Community Services District v. Shell Oil Company, et al., filed in May 1995, and pending in Superior Court for the County of Santa Barbara, California; Alameda County Water District v. Mobil Oil Corporation, et al., filed in April 1996, and Marin Municipal Water District v. Shell Oil Company, et al., filed in May 1996, both pending in Superior Court for the County of San Mateo; and City of Austin v. Shell Oil Company, et al., filed in June 1996 and pending in the District Court of Travis County, Texas. The actions generally allege that the company and several other defendants negligently misrepresented the performance of polybutylene pipe and fittings installed in water distribution systems. Other allegations in the California and Texas actions include breach of the California Unfair Practices Act and the Texas Deceptive Practices Act, respectively; breach of warranty, fraud and strict liability. It is possible that the company may be named as a defendant in future actions arising out of its past involvement in the polybutylene resin manufacturing business. The company is a defendant in an action filed on May 15, 1992 in New Jersey state court styled Gordon et al. v. Witco Corporation, Superior Court of New Jersey Law Division - Morris County Docket No. MRS-L-2165-92 in which nine former employees of the company sought compensatory and punitive damages on the basis their termination of employment by the company violated the New Jersey age discrimination statute and caused loss of income and emotional harm. Prior to the trial of the action the company settled the claims of five of the plaintiffs. Following trial and while the jury deliberated, the company settled the claims of two of the remaining plaintiffs, but the jury was not informed of the settlements. On March 6, 1996, the jury in the action awarded a verdict of compensatory and punitive damages in favor of three plaintiffs (two of whom had settled and were limited to the settlement amounts) and a verdict in favor of the company and against the fourth plaintiff. On May 29, 1996, judgment was entered in favor of the non-settling plaintiff in the amount of $2,252,265.50, together with post-judgment interest. The company has filed an appeal which is presently pending in the Superior Court of New Jersey, Appellate Division, challenging the verdicts and various decisions by the trial court and asking for judgment notwithstanding the verdict or a new trial. The one successful plaintiff has filed an appeal for further damages and attorney's fees. The unsuccessful plaintiff has also filed an appeal seeking a new trial on all issues. The parties have consented to a stay of the judgment pending the outcome of the appeal process and the company has posted a bond for the judgment. The company is not a party to any legal proceedings, including environmental matters, which it believes will have a material adverse effect on its consolidated financial position. However, the company's results could be materially affected in future periods by the resolution of these contingencies. 7 Independent Accountants' Review Report The Board of Directors Witco Corporation We have reviewed the accompanying condensed consolidated balance sheet of Witco Corporation and Subsidiary Companies as of June 30, 1996, and the related condensed consolidated statements of operations for the three-month and six-month periods ended June 30, 1996 and 1995, and the condensed consolidated statements of cash flows for the six-month periods ended June 30, 1996 and 1995. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Witco Corporation and Subsidiary Companies as of December 31, 1995, and the related consolidated statements of income, shareholders' equity, and cash flows for the year then ended (not presented herein) and in our report dated January 29, 1996, except for Note 7, as to which the date is February 12, 1996, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1995, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. ERNST & YOUNG LLP Stamford, Connecticut August 13, 1996 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND FINANCIAL RESOURCES Cash and cash equivalents decreased $24.3 million during the first six months of 1996 primarily from an increase in accounts receivable and increased capital spending. The OSi Specialties, Inc. ("OSi Specialties") business acquired in the fourth quarter of 1995 is the primary reason for the company's increased capital spending levels. At December 31, l995, the company had $605 million of bank loans outstanding under a credit agreement with a consortium of banks. On February 12, l996, the company issued $150 million of 6.125% Notes due 2006 and $150 million of 6.875% Debentures due 2026. The net proceeds of $297 million, plus cash on hand, were used to repay $300 million of bank loans under the credit agreement. Immediately thereafter, the availability under the credit agreement, as amended, was reduced to $375 million. The company plans to repay the remaining $305 million with available proceeds from the divestiture of the Lubricants Group, cash flow from operations or additional long-term financing. The company anticipates net proceeds from the divestiture of the Lubricants Group, after taxes, will approximate $140 million during 1996. The company anticipates that net cash after taxes of approximately $50 million will be spent in future years to satisfy obligations, including environmental liabilities, that will remain with the company related to the divestiture of the Lubricants Group. The result of the Lubricants Group divestiture, which is expected to be completed by year-end, is an anticipated favorable net cash impact after taxes of approximately $90 million. CAPITAL INVESTMENTS AND COMMITMENTS Capital expenditures for the first six months of 1996 amounted to $77.9 million, as compared to $49.1 million during the same period of 1995. Capital expenditures related to continuing operations as of June 30, l996 and 1995 were $70.8 million and $40.1 million, respectively. The company expects that capital expenditures for the year ending December 31, 1996 related to continuing operations will be in the range of $150 million to $170 million. CONTINGENCIES The company has been notified that it is a potentially responsible party ("PRP") or a defendant in a number of governmental (federal, state and local) and private actions associated with the release, or suspected release, of contaminants into the environment. As a PRP, the company may be liable for costs associated with the investigation and remediation of environmental contamination, as well as various penalties and damages to persons, property and natural resources. The company is not a party to any legal proceedings or environmental matters which it believes will have a material adverse effect on its consolidated financial position. However, the company's results could be materially affected in future periods by the resolution of these contingencies. The company, however, does not expect the results of such proceedings or environmental matters to materially affect its competitive position. DISCONTINUED OPERATIONS On September 11, l995, the company announced its intention to divest its Lubricants Group (see Note C of Notes to Financial Statements for additional details). 9 RESULTS FROM CONTINUING OPERATIONS The company reported income from continuing operations of $18.5 million for the second quarter of 1996 and $44.1 million for the six months ended June 30, 1996, compared to $69.0 million and $99.3 million for the corresponding quarter and six months ended June 30, 1995, respectively. A comparison of these periods is affected by non-recurring gains. The following table shows the effect of these non-recurring items on income.
(Unaudited - millions of dollars Three Months Ended June 30, except per share data) 1996 1995 - ------------------------------------------------ --------------------------------- --------------------------------- Pre-Tax Income Pre-Tax Income Income Income Per Share Income Income Per Share - ------------------------------------------------ ------- ------ --------- ------ ------ -------- Continuing operations excluding non-recurring items $ 31.9 $ 18.5 $ .33 $ 30.9 $ 18.9 $ .34 Insurance settlements -- -- -- 37.7 23.0 .40 Gain on disposition of operations of a subsidiary -- -- -- 44.5 27.1 .48 - ------------------------------------------------ ------ ------ ------ ------ ------ ------ Continuing operations $ 31.9 $ 18.5 $ .33 $113.1 $ 69.0 $ 1.22 - ------------------------------------------------ ------ ------ ------ ------ ------ ------ (Unaudited - millions of dollars Six Months Ended June 30, except per share data) 1996 1995 - ------------------------------------------------ --------------------------------- --------------------------------- Pre-Tax Income Pre-Tax Income Income Income Per Share Income Income Per Share - ------------------------------------------------ ------- ------ --------- ------ ------ -------- Continuing operations excluding non-recurring items $ 75.0 $ 44.1 $ .77 $ 69.4 $ 43.3 $ .77 Insurance settlements -- -- -- 37.7 23.0 .40 Gain on disposition of operations of subsidiaries -- -- -- 54.0 33.0 .59 - ------------------------------------------------ ------ ------ ------ ------ ------ ------ Continuing operations $ 75.0 $ 44.1 $ .77 $161.1 $ 99.3 $ 1.76 - ------------------------------------------------ ------ ------ ------ ------ ------ ------
Second quarter 1996 net sales from continuing operations of $571.5 million were 17 percent greater than those for the same period in 1995. The acquisition of OSi Specialties accounted for the increase in sales and more than offset the loss in sales attributable to the 1995 divestiture of the Diversified Products Segment and the first quarter 1996 sale of the company's 60 percent interest in Witco Ltd. Net sales from continuing operations, excluding OSi Specialties and the aforementioned dispositions, rose approximately $4 million. While volume remained flat, higher sales prices and a favorable product sales mix offset the effect of unfavorable foreign currency translations, causing sales to rise. Income from continuing operations for the second quarter of 1996 was $18.5 million, compared to $18.9 million, excluding non-recurring items, for the same period of 1995. The $0.4 million decline was a result of higher interest expense attributable to financing the OSi Specialties acquisition and the assumption of OSi Specialties' debt, coupled with a 3 percent rise in the effective tax rate primarily due to the non-deductible amortization of goodwill arising from the OSi Specialties acquisition. This offsets a 0.9 percent increase in the operating income margin, mainly attributable to the improved operating results reported by the company's Chemical Segment. The effect of adding OSi Specialties' higher margin business to the 1996 results was offset by the absence of the Carbon Black business included in the Diversified Products Segment which reported high margins in 1995. 10 Sales of $1.2 billion for the six months ended June 30, 1996 were 15 percent higher than sales for the corresponding period in 1995. OSi Specialties' contribution to 1996 sales surpassed those attributable to the company's businesses sold in 1995 and 1996. Excluding sales attributable to the businesses either sold or acquired in 1995 and 1996, current year sales declined approximately $3 million compared to 1995. The adverse effect of foreign currency translations of $14.1 million was partially offset by higher sales prices and a favorable product sales mix. Income from continuing operations was $44.1 million for the first six months of 1996, compared to $43.3 million, excluding non-recurring items, for the same period in 1995. This increase was attributable to a 1.2 percent improvement in the operating income margin which was partially offset by increases in interest expense and the effective tax rate, for reasons noted in the quarter comparison. The acquisition of OSi Specialties added 1.4 percent to the current year operating income margin, while the disposition of the Diversified Products businesses had a 0.8 percent adverse effect. The balance of the margin improvement was a result of a reduction in other operating costs which was mainly attributable to miscellaneous income items in the first quarter. The company plans to adopt the disclosure provisions of Statement of Financial Accounting Standards No. 123, "Accounting and Disclosure of Stock-Based Compensation," in 1996. Accordingly, operating results will not be affected by the adoption. SEGMENT INFORMATION Segment net sales and operating income for the second quarter and first six months of 1996 and 1995 are set forth in the following table. As a result of the company's decision to sell the Lubricants Group, the operating results of which have been recorded as discontinued operations, the Petroleum Segment consists solely of the Petroleum Specialties Group.
Three Months Ended June 30, Six Months Ended June 30, (Unaudited - millions of dollars) 1996 1995 1996 1995 - ---------------------------------------------------------- -------- -------- -------- -------- Net sales Chemical $ 362.7 $ 371.1 $ 740.4 $ 753.2 OSi Specialties 113.4 -- 226.3 -- Petroleum 96.1 93.9 195.3 197.6 Diversified products -- 25.7 -- 61.4 Intersegment elimination (.7) (1.5) (1.1) (5.0) - ---------------------------------------------------------- -------- -------- -------- -------- Net sales $ 571.5 $ 489.2 $1,160.9 $1,007.2 - ---------------------------------------------------------- -------- -------- -------- -------- Operating income from continuing operations: Chemical $ 32.0 $ 28.0 $ 68.5 $ 61.9 OSi Specialties 16.1 -- 33.8 -- Petroleum 6.1 7.1 12.7 15.2 Diversified products -- 50.4 -- 66.0 Corporate and unallocated (6.0) 33.3 (7.6) 30.5 - ---------------------------------------------------------- -------- -------- -------- -------- Operating income from continuing operations $ 48.2 $ 118.8 $ 107.4 $ 173.6 - ---------------------------------------------------------- -------- -------- -------- --------
11 CHEMICAL SEGMENT The Chemical Segment's second quarter 1996 sales of $362.7 million were 2 percent lower than the corresponding quarter of 1995. The sale of the company's 60 percent interest in Witco Ltd., located in Haifa, Israel, accounted for the segment's lower sales. Excluding Witco Ltd., the effect of higher sales prices and a favorable product sales mix was offset by unfavorable foreign currency translations and a 2 percent decline in shipment volume. The Chemical Segment's second quarter operating income increased 14 percent to $32 million compared to the second quarter of 1995. This increase in earnings was primarily attributable to an improved gross profit margin resulting from higher sales prices and lower manufacturing costs, achieved primarily through productivity improvement initiatives. The segment's Oleo/Surfactants and Polymer Additives Groups both reported higher operating earnings. The Oleo/Surfactants Group benefited from a favorable product sales mix, higher sales prices and increased agricultural surfactants shipments resulting from an extended planting season and greater market penetration. An upturn in the construction industry and the ability to recover a portion of past feedstock price increases through higher sales prices resulted in improved earnings for the segment's Polymer Additives Group. Second quarter Resins Group earnings were lower than those reported for the prior year. The group was adversely affected by a weakness in the polyester foam industry, the lowering of sales prices to meet competitive pressures and start up costs attributable to the group's Singapore facility. Sales of $740.4 million reported by the Chemical Segment for the six months ended June 30, 1996 were 2 percent lower than the corresponding period of 1995. Approximately 50 percent of the decline in sales was attributable to the sale of Witco Ltd. The balance of the decrease was due to a 2 percent decline in volume and unfavorable foreign currency translations, partially offset by higher sales prices and favorable product mix. The Chemical Segment's operating income of $68.5 million for the first six months of 1996 was 11 percent greater than the income reported for the same period in 1995. The segment continues to benefit from stable feedstock prices and cost savings initiatives, while sales prices remain ahead of 1995. Consistent with the second quarter comparison, current year operating earnings for the Oleo/Surfactants and Polymer Additives Groups were ahead of the prior year. An increase in the global demand for agricultural surfactants and laundry products, along with greater shipments from the group's European operations, added to the Oleo/Surfactants Group's improved earnings. This group reported higher product margins that were achieved primarily through sales price increases in certain business sectors and successful cost savings measures which offset higher expenses attributable to the current year's severe winter weather. The Polymer Additives Group's domestic operations reported higher earnings, while its international earnings were flat compared to 1995. Cost reductions achieved through productivity improvement initiatives was the predominant factor leading to the group's improved performance. Lower operating earnings reported by the segment's Resins Group were attributable to market induced sales price reductions, reduced European product demand, and increased costs associated with the current year's severe winter in the United States and Europe. OSi SPECIALTIES SEGMENT OSi Specialties, acquired during the fourth quarter of 1995, added $113.4 million and $226.3 million, respectively, to Witco's reported net sales for the second quarter and six months ended June 30, 1996. Although not included in Witco's 1995 results, the segment's net sales for both the second quarter and six months ended June 30, 1996 were 2 percent lower than in 1995. OSi Specialties contributed $16.1 million and $33.8 million, inclusive of acquisition related amortization, respectively, to the company's second quarter and six months reported 1996 operating income. Current year earnings for the quarter and six months ended June 30, l996 were 2 percent and 12 percent greater, respectively, than the prior year's earnings, on a pro forma basis, due to a favorable product sales mix, higher sales prices, manufacturing efficiencies and a reduced dependence on purchased intermediate feedstocks. 12 PETROLEUM SEGMENT Second quarter 1996 Petroleum Segment sales of $96.1 million were 2 percent ahead of the corresponding period of 1995. An increase in shipment volume of approximately 7 percent more than offset the impact of an unfavorable product mix and foreign currency translations. Second quarter Petroleum Segment operating income of $6.1 million continued to lag behind prior year reported earnings. The $1.0 million decline was primarily a result of additional costs attributable to the under-utilization of manufacturing capacity that recently became available through plant expansions. The resulting excess capacity was due to lower than expected product demand. The Petroleum Segment's sales of $195.3 million for the first six months of 1996 were 1 percent lower than the sales reported for the same period of 1995. Although volume rose 3 percent compared to 1995, lower sales prices and unfavorable foreign currency translations resulted in a decline in sales. Petroleum Segment operating income for the six months ended June 30, 1996 of $12.7 million declined $2.5 million compared to the corresponding period of 1995. The inability to recover costs associated with recently completed plant expansions due to lower than anticipated product demand, coupled with an erosion of product margins attributable to competitive pricing pressures and an unfavorable sales product mix, caused operating income to decline. DIVERSIFIED PRODUCTS SEGMENT The final phase of the Diversified Products Segment's divestiture program was completed during the second quarter of 1995. This segment's operating income for the second quarter and six months ended June 30, 1995 included pre-tax gains of $44.5 million and $54.0 million, respectively, from the sale of the segment's businesses. CORPORATE AND UNALLOCATED Corporate and unallocated for both the second quarter and six months ended June 30, 1995 included $37.7 million of insurance settlements, net of legal and other costs, with certain of the company's insurance carriers arising out of litigation concerning coverage for certain environmental expenditures. OUTLOOK The company is disappointed with second quarter 1996 earnings and does not anticipate business conditions or earnings realized in the first six months of 1996 improving in the second half of the year. In an effort to place a greater emphasis on the Specialty Chemicals segment of its business, the company will continue with the divestiture of its non-core Lubricants Group during the latter half of 1996. Consistent with this plan, on August 5, 1996, the company announced that it had entered into a purchase agreement with Sun Company, Inc., pursuant to which Sun Company, Inc. will purchase certain assets of the Kendall/Amalie unit of the company's Lubricants Group. The sale is expected to close in late 1996. The acquisition will include customer lists, trademarks, blending and packaging facilities and distribution centers; however, three locations will not be included in the sale. Discussions are currently underway with prospective purchasers for the remaining units of the Lubricants Group. While continuing its asset consolidation initiatives, the company plans to focus efforts on lowering manufacturing costs and building market strength in an effort to increase sales and earnings in 1997 and beyond. 13 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings The company has been notified that it is a potentially responsible party ("PRP") or a defendant in a number of governmental (federal, state, and local) and private actions associated with the release, or suspected release, of contaminants into the environment. As a PRP, the company may be liable for costs associated with the investigation and remediation of environmental contamination, as well as various penalties and damages to persons, property and natural resources. As of June 30, 1996, the company was a PRP, or a defendant, in connection with 67 sites at which it is likely to incur costs associated with environmental investigation or remedial actions which have been or will be executed pursuant to the federal Comprehensive Environmental Response Compensation and Liability Act ("CERCLA"), the federal Resource Conservation and Recovery Act ("RCRA") or similar state or local laws. With 21 exceptions, all of these sites involve one or more other PRPs, and in most cases, there are numerous other PRPs in addition to the company. CERCLA, RCRA, and the state counterparts to these federal laws authorize governments to investigate and remediate actual or suspected damage to the environment caused by the release or suspected release of hazardous substances into the environment, or to order the responsible parties to investigate and/or remediate such environmental damage. The company evaluates and reviews environmental reserves for future remediation and other costs on a quarterly basis to determine appropriate reserve amounts. Inherent in this process are considerable uncertainties which affect the company's ability to estimate the ultimate costs of remediation efforts. Such uncertainties include the nature and extent of contamination at each site, evolving governmental standards regarding remediation requirements, changes in environmental regulations, widely varying costs of alternative cleanup methods, the number and financial condition of other potentially responsible parties at multi-party sites, innovations in remediation and restoration technology, and the identification of additional environmental sites. The company is a defendant in six similar actions arising out of the company's involvement in the polybutylene resin manufacturing business in the 1970's. Five of the following cases are currently pending in California state courts and one is pending in Texas state court: East Bay Municipal Utility District v. Mobil Oil Corporation, et al., filed in November 1993, and pending in Superior Court for the County of San Mateo, California; City of Santa Maria v. Shell Oil Company, et al., filed in May 1994, and pending in Superior Court for the County of San Luis Obispo, California; Nipomo Community Services District v. Shell Oil Company, et al., filed in May 1995, and pending in Superior Court for the County of Santa Barbara, California; Alameda County Water District v. Mobil Oil Corporation, et al., filed in April 1996, and Marin Municipal Water District v. Shell Oil Company, et al., filed in May 1996, both pending in Superior Court for the County of San Mateo; and City of Austin v. Shell Oil Company, et al., filed in June 1996 and pending in the District Court of Travis County, Texas. The actions generally allege that the company and several other defendants negligently misrepresented the performance of polybutylene pipe and fittings installed in water distribution systems. Other allegations in the California and Texas actions include breach of the California Unfair Practices Act and the Texas Deceptive Practices Act, respectively; breach of warranty, fraud and strict liability. It is possible that the company may be named as a defendant in future actions arising out of its past involvement in the polybutylene resin manufacturing business. The company is a defendant in an action filed on May 15, 1992 in New Jersey state court styled Gordon et al. v. Witco Corporation, Superior Court of New Jersey Law Division - Morris County Docket No. MRS-L-2165-92 in which nine former employees of the company sought compensatory and punitive damages on the basis their termination of employment by the company violated the New Jersey age discrimination statute and caused loss of income and emotional harm. Prior to the trial of the action the company settled the claims of five of the plaintiffs. Following trial and while the jury deliberated, the company settled the claims of two of the remaining plaintiffs, but the jury was not informed of the settlements. On March 6, 1996, the jury in the action awarded a verdict of compensatory and punitive damages in favor of three plaintiffs (two of whom had settled and were limited to the settlement amounts) and a verdict in favor of the company and against the fourth plaintiff. On May 29, 1996, judgment was entered in favor of the non-settling plaintiff in the amount of $2,252,265.50 together with post-judgment interest. The company has filed an appeal which is presently pending in the Superior Court of New Jersey, Appellate Division, challenging the verdicts and various decisions by the trial court and asking for judgment notwithstanding the verdict or a new trial. The one successful plaintiff has filed an appeal for further damages and attorney's fees. The unsuccessful plaintiff has also filed an appeal seeking a new trial on all issues. The parties have consented to a stay of the judgment pending the outcome of the appeal process and the company has posted a bond for the judgment. 14 On November 3, 1995, the United States filed suit against the company in United States District Court for the Central District of Illinois seeking up to $4.5 million in civil penalties for the alleged discharge of pollutants in violation of the Clean Water Act. In this action, the United States alleges that, at various times from 1990 to 1993, the company discharged pollutants into the Illinois River from its Mapleton, Illinois facility without first obtaining a National Pollutant Discharge Elimination System Permit. The company is not a party to any legal proceedings, including environmental matters, which it believes will have a material adverse effect on its consolidated financial position. However, the company's results could be materially affected in future periods by the resolution of these contingencies. ITEM 4. Submission of Matters to a Vote of Security Holders (a) The company's Annual Meeting of Shareholders was held on April 24, 1996, at the offices of the company, One American Lane, Greenwich, Connecticut. (b) At the Annual Meeting, the company's shareholders elected three directors, each to serve a term expiring in 1999, as follows: Votes --------------------------------- For Withheld ---------- -------- Harry G. Hohn 50,423,618 872,667 Dan J. Samuel 50,359,653 936,632 Bruce F. Wesson 50,450,115 846,170 Directors who did not stand for election and whose terms expire in 1997 are: Simeon Brinberg, William R. Grant, Richard M. Hayden, and William R. Toller. Directors who did not stand for election and whose terms expire in 1998 are: William G. Burns, William E. Mahoney, L. John Polite, Jr., and William Wishnick. (Director William E. Mahoney retired as an officer and director of the company in June 1996.) (c) In addition to the election of directors, at the Annual Meeting the company's shareholders: (i) Approved the adoption of the Witco Corporation Long Term Incentive Plan. Votes ------------------------------------------------------------ For Against Abstain ---------- --------- ------- 44,775,728 6,352,715 167,842 (ii) Approved the amendment of the 1995 Stock Option Plan for Employees of Witco Corporation and its Subsidiaries. Votes ------------------------------------------------------------ For Against Abstain ---------- --------- ------- 43,198,164 7,916,533 181,288 (iii)Ratified the appointment of Ernst & Young LLP as the company's independent auditors for 1996. Votes ------------------------------------------------------------ For Against Abstain ---------- --------- ------- 50,774,062 463,388 58,835 (iv) Defeated a shareholder proposal requesting diversity on the Board of Directors. Votes ------------------------------------------------------------ Against For Abstain ---------- --------- ------- 40,346,495 7,719,426 882,062 15 ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits 11 Statement re computation of per share earnings 15 Letter re unaudited interim financial information 27 Financial Data Schedule (b) Reports on Form 8-K The company filed two Current Reports on Form 8-K, the first, dated June 12, 1996 and filed with the Securities and Exchange Commission on June 17, 1996, pertained to a change in management, with the company's Board of Directors naming Dr. E. Gary Cook Chairman, Chief Executive Officer and President of the company succeeding William R. Toller, the company's Chairman and Chief Executive Officer, who retired. Mr. Toller was named Honorary Chairman and will remain as a director. William E. Mahoney, the company's Vice Chairman and Chief Operating Officer, also retired. The second Current Report on Form 8-K, dated June 21, 1996 and filed with the Securities and Exchange Commission on that date, pertained to the company revising the format of its statements of income, thereby reclassifying the consolidated statements of income and continuing operations by industry segment for the quarters ended March 31, 1995, June 30, 1995, September 30, 1995 and December 31, 1995, respectively, and for the year ended December 31, 1995. 16 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. WITCO CORPORATION (Registrant) /s/ Peter J. Biancotti Date: August 14, 1996 ------------------------------------- Peter J. Biancotti Controller - Chief Accounting Officer /s/ Dustan E. McCoy Date: August 14, 1996 ------------------------------------- Dustan E. McCoy Vice President, General Counsel and Corporate Secretary 17 WITCO CORPORATION INDEX TO EXHIBITS Exhibit No. Description Page No. ----------- ----------- -------- 11 Statement re computation of per share earnings 19 15 Letter re unaudited interim financial information 20 27 Financial Data Schedule 21 18 EX-11 2 COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11 WITCO CORPORATION AND SUBSIDIARY COMPANIES COMPUTATION OF PER SHARE EARNINGS (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, -------------------------- -------------------------- 1996 1995 1996 1995 --------- --------- --------- --------- (In Thousands Except Per Share Data) PRIMARY Income from Continuing Operations $ 18,519 $ 69,021 $ 44,100 $ 99,291 Dividend requirements of preferred stock (4) (4) (9) (9) --------- --------- --------- --------- Total 18,515 69,017 44,091 99,282 Income (Loss) from Discontinued Operations (68,253) 2,333 (67,913) 1,838 --------- --------- --------- --------- Net Income (Loss) $ (49,738) $ 71,350 $ (23,822) $ 101,120 ========= ========= ========= ========= Weighted average shares outstanding 56,585 56,248 56,534 56,205 Assumed conversions: Stock options 405 212 409 205 --------- --------- --------- --------- Total 56,990 56,460 56,943 56,410 ========= ========= ========= ========= Per share amounts: Income from Continuing Operations $ .33 $ 1.22 $ .77 $ 1.76 Income (Loss) from Discontinued Operations (1.20) .04 (1.19) .03 --------- --------- --------- --------- Net Income (Loss) $ (.87) $ 1.26 $ (.42) $ 1.79 ========= ========= ========= ========= FULLY DILUTED Income from Continuing Operations $ 18,519 $ 69,021 $ 44,100 $ 99,291 Income (Loss) from Discontinued Operations (68,253) 2,333 (67,913) 1,838 --------- --------- --------- --------- Net Income (Loss) $ (49,734) $ 71,354 $ (23,813) $ 101,129 ========= ========= ========= ========= Weighted average shares outstanding 56,585 56,248 56,534 56,205 Assumed conversions: Stock options 462 295 475 315 Preferred stock 114 116 115 119 --------- --------- --------- --------- Total 57,161 56,659 57,124 56,639 ========= ========= ========= ========= Per share amounts: Income from Continuing Operations $ .32 $ 1.22 $ .77 $ 1.76 Income (Loss) from Discontinued Operations (1.19) .04 (1.19) .03 --------- --------- --------- --------- Net Income (Loss) $ (.87) $ 1.26 $ (.42) $ 1.79 ========= ========= ========= =========
19 EX-15 3 ACKNOWLEDGMENT LETTER EXHIBIT 15 LETTER RE: UNAUDITED FINANCIAL INFORMATION ACKNOWLEDGMENT LETTER August 13, 1996 The Board of Directors Witco Corporation We are aware of the incorporation by reference in the Registration Statement (Form S-3, No. 33-45865) and the Post-effective Amendment No. 2 to the Registration Statement (Form S-3, No. 33-58066), each pertaining to the issuance of debentures, the Post-effective Amendment No. 1 to the Registration Statement (Form S-3, No. 33-58120), pertaining to the issuance of common stock, the Registration Statement (Form S-3, No. 33-65203), pertaining to the issuance of notes and debentures, the Post-effective Amendment No. 2 to the Registration Statement (Form S-8, No. 33-10715), Post-effective Amendment No. 1 to the Registration Statements (Form S-8, Nos. 33-30995 and 33-45194), each pertaining to stock option plans of Witco Corporation, the Registration Statement (Form S-8, No. 33-48806), pertaining to an employee benefit plan of Witco Corporation, the Registration Statement (Form S-8, No. 33-60755), pertaining to the 1995 Stock Option Plan for Employees of Witco Corporation and its Subsidiaries, and the Post Effective Amendment No. 1 to the Registration Statement (Form S-8, No. 333-05509), pertaining to the 1995 Stock Option Plan for Employees of Witco Corporation and its Subsidiaries, of our report dated August 13, 1996 relating to the unaudited condensed consolidated interim financial statements of Witco Corporation and Subsidiary Companies which is included in its Form 10-Q for the quarter ended June 30, 1996. Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not part of the registration statements prepared or certified by accountants within the meaning of Sections 7 or 11 of the Securities Act of 1933. ERNST & YOUNG LLP Stamford, Connecticut 20 EX-27 4 ART. 5 FDS FOR 2ND QUARTER 10-Q
5 1,000 6-MOS DEC-31-1996 JUN-30-1996 119,652 0 435,269 9,809 324,532 939,651 1,432,247 634,349 2,750,014 748,501 678,907 0 7 283,247 666,118 2,750,014 1,160,883 1,160,883 883,025 883,025 0 3,351 35,393 75,034 30,934 44,100 (67,913) 0 0 (23,813) (.42) (.42)
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