-----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, IzdKtUVfceiqZ2uyXuJyQ5Ow8dPBogwTsGJ5wTi8BXyDJniIpvJePJsYrOkBaDKa PyCYD4XCYLSrnkKSa5wurg== 0000912057-96-017506.txt : 19960814 0000912057-96-017506.hdr.sgml : 19960814 ACCESSION NUMBER: 0000912057-96-017506 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMCO RECYCLING INC CENTRAL INDEX KEY: 0000202890 STANDARD INDUSTRIAL CLASSIFICATION: SECONDARY SMELTING & REFINING OF NONFERROUS METALS [3341] IRS NUMBER: 752008280 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07170 FILM NUMBER: 96610651 BUSINESS ADDRESS: STREET 1: 5215 N OCONNOR BLVD STE 940 CITY: IRVING STATE: TX ZIP: 75007 BUSINESS PHONE: 2148696575 MAIL ADDRESS: STREET 1: 5215 N O CONNOR BOULVARD STE 940 CITY: IRVING STATE: TX ZIP: 75030 FORMER COMPANY: FORMER CONFORMED NAME: FRONTIER TEXAS CORP DATE OF NAME CHANGE: 19881012 FORMER COMPANY: FORMER CONFORMED NAME: PIONEER TEXAS CORP DATE OF NAME CHANGE: 19850416 10-Q 1 FORM 10-Q 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 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NO. 1-7170 IMCO Recycling Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 75-2008280 (I.R.S. Employer Identification No.) 5215 North O'Connor Blvd. Suite 940 Central Tower at Williams Square Irving, Texas 75039 (Address of principal executive offices) (214) 869-6575 (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 ----- ---- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of July 31, 1996. COMMON STOCK, $0.10 PAR VALUE, 11,888,552 PART 1 - FINANCIAL INFORMATION ITEM 1. - FINANCIAL STATEMENTS IMCO RECYCLING INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share) June December 30, 31, 1996 1995 ---- ---- ASSETS (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 9,075 $ 8,678 Accounts receivable 28,147 27,442 Inventories 15,808 9,146 Deferred income tax 1,227 1,298 Other current assets 1,647 1,353 --------- --------- TOTAL CURRENT ASSETS 55,904 47,917 PROPERTY AND EQUIPMENT, NET 77,935 78,769 INTANGIBLE ASSETS Excess acquisition cost over the fair value of net assets acquired, net of amortization of $4,316 and $3,866, respectively. 10,564 10,968 Patents 202 233 --------- --------- TOTAL INTANGIBLE ASSETS 10,766 11,201 INVESTMENTS IN JOINT VENTURES 14,474 ---- OTHER ASSETS, NET 797 1,990 --------- --------- $ 159,876 $ 139,877 --------- --------- --------- --------- LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 9,256 $ 10,691 Accrued liabilities 4,070 7,059 Current maturities of long-term debt 2,154 2,169 --------- --------- TOTAL CURRENT LIABILITIES 15,480 19,919 LONG-TERM DEBT 49,185 29,754 OTHER LONG-TERM LIABILITIES 1,126 1,412 DEFERRED INCOME TAX 5,893 5,516 STOCKHOLDERS' EQUITY Preferred Stock; par value $.10; 8,000 shares authorized; none issued -- -- Common Stock; par value $.10; 20,000 shares authorized; 12,015 issued at June 30, 1996 11,965 at December 31, 1995 1,201 1,196 Additional paid in capital 27,558 27,282 Retained earnings 61,050 56,672 Treasury stock, at cost; 134 shares at June 30, 1996; 208 shares at December 31, 1995 (1,617) (1,874) --------- --------- 88,192 83,276 --------- --------- $ 159,876 $ 139,877 --------- --------- --------- ---------
IMCO RECYCLING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (in thousands, except per share) For the three months ended June 30, For the six months ended June 30, ----------------------------------- --------------------------------- 1996 1995 1996 1995 ---- ---- ---- ---- REVENUES $ 50,465 $ 29,725 $ 101,183 $ 60,471 Cost of sales 42,658 22,410 85,486 45,721 ------ ------ ------ ------ GROSS PROFIT 7,807 7,315 15,697 14,750 Selling, general and administrative expense 2,888 2,252 5,869 4,647 Interest expense 980 233 1,590 513 Interest income (238) (103) (382) (167) Equity earnings of joint ventures (116) -- (423) -- ----- ----- ----- ----- INCOME BEFORE PROVISION FOR INCOME TAXES 4,293 4,933 9,043 9,757 Provision for income taxes 1,695 1,974 3,482 3,904 ----- ----- ----- ----- NET EARNINGS $ 2,598 $ 2,959 $ 5,561 $ 5,853 -------- -------- -------- -------- -------- -------- -------- -------- Net earnings per common share $ 0.21 $ 0.25 $ 0.45 $ 0.49 -------- -------- -------- -------- -------- -------- -------- -------- Dividends declared per common share $ .05 $ .035 $ .10 $ .035 -------- -------- -------- -------- -------- -------- -------- -------- Weighted average common and common equivalent shares outstanding 12,377 12,014 12,387 11,966 -------- -------- -------- -------- -------- -------- -------- --------
IMCO RECYCLING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
For the six months ended ------------------------ June 30, -------- 1996 1995 ---- ---- OPERATING ACTIVITIES: Net earnings $ 5,561 $ 5,853 Depreciation and amortization 5,673 4,484 Provision for deferred income taxes 448 821 Equity earnings from joint ventures (423) --- Other noncash charges 661 471 Loss on sale of property and equipment 7 2 Changes in noncash components of working capital (excluding investing and financing transactions) Accounts receivable (721) 1,896 Inventories (6,661) (632) Other current assets (294) (606) Accounts payable and accrued liabilities (4,424) (170) ------ ---- NET CASH (USED BY) FROM OPERATING ACTIVITIES (173) 12,119 INVESTING ACTIVITIES: Purchase of property and equipment (4,480) (4,373) Proceeds from sale of property and equipment 510 67 Investment in joint ventures (13,240) --- Other (989) (218) ---- ---- NET CASH (USED BY) INVESTING ACTIVITIES (18,199) (4,524) FINANCING ACTIVITIES: Proceeds from long-term debt 20,475 -- Principal payments of long-term debt (1,061) (705) Dividends paid (1,183) (1,554) Tax benefit from the exercise of stock options 731 156 Other (193) 85 --- -- NET CASH FROM (USED BY) FINANCING ACTIVITIES 18,769 (2,018) ------ ------ Net increase (decrease) in Cash and Cash Equivalents 397 5,577 Cash and Cash Equivalents at January 1 8,678 2,854 ----- ----- Cash and Cash Equivalents at June 30 $ 9,075 $ 8,431 ---------- ----------- ---------- ----------- SUPPLEMENTARY INFORMATION: Cash payments for interest $ 1,355 $ 625 ---------- ---------- ---------- ---------- Cash payments for income taxes $ 6,398 $ 3,610 ---------- ---------- ---------- ----------
IMCO RECYCLING INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 1996 NOTE A - BASIS OF PRESENTATION The accompanying unaudited 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 Article 10 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 (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended June 30, 1996 are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. The accompanying financial statements include the accounts of IMCO Recycling Inc. and all of its subsidiaries (the "Company"). All significant intercompany accounts and transactions have been eliminated. 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. NOTE B - INVENTORIES The components of inventories are: (dollars in thousands) June 30, December 31, 1996 1995 ---- ---- Finished goods $ 11,357 $ 6,839 Raw materials 4,185 1,986 Supplies 266 321 --- --- $ 15,808 $ 9,146 --------- -------- --------- -------- NOTE C - LONG-TERM DEBT The Company's total capital spending in the first half of 1996 was $4,480,000. Capital expenditures for all of 1996 are expected to be approximately $20,000,000. The majority of this spending will be in connection with the new aluminum recycling facility the Company is constructing at Coldwater, Michigan. The Company will own 75% of this facility which will principally serve the automotive markets. Construction is expected to be completed in early 1997. In April 1996 the Company borrowed $15,000,000 under terms previously negotiated with The Mutual Life Insurance Company of New York. Terms of this unsecured borrowing include interest of 7.41% and mandatory prepayments of $3,000,000 scheduled for each October 31 beginning in 2003. These notes mature on October 31, 2007. In May 1996 most of these proceeds were used to fund the Company's initial investment in an equity joint venture with VAW aluminium AG ("VAW"), the largest aluminum company in Germany. The joint venture, VAW-IMCO Gus und Recycling GmbH ("VAW-IMCO"), currently has the capacity to process 220 million pounds of aluminum annually. Income from this joint venture is recorded on the Company's books as equity income. In addition, on May 8, 1996, the Company borrowed the net proceeds of approximately $5,569,000 from the issuance of $5,740,000 principal amount of Solid Waste Disposal Facilities Revenue Bonds by the City of Morgantown, Kentucky. These bonds, which are due on May 1, 2016 and carry an interest rate of 7.65%, were issued in connection with the Company's construction of its salt cake processing plant at Morgantown which was completed in January 1996. See "RESULTS OF OPERATIONS". ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company is in the resource recovery industry and provides recycling services for primary manufacturers of metal. The Company's principal activity involves the recycling of aluminum and aluminum scrap and by-products. The Company also recycles magnesium and zinc. The Company's financial performance has historically been largely determined by the volume of metal it processes. In recent periods the Company's financial results have also been impacted by the change in the price of aluminum. The largest portion of the Company's business is the processing of customer-owned material for a fee (a service called "tolling"). In addition to tolling, the Company to a lesser extent also purchases material for processing and resale ("buy/sell business"). Both the Company's tolling fees per pound recycled and the selling price of metal it owns, recycles and sells for its own account are included in revenues. Variations in the mix between these two types of transactions can cause revenue amounts to change significantly from period to period while generally not significantly affecting total gross profit, because both types of transactions have historically had approximately the same gross profit value per pound of metal processed. The following table shows the total pounds of metal processed, the percentage of total pounds processed represented by tolled metal, total revenues and total gross profit in the three and six month periods ended June 30:
----------------------------------------------------------- Three months Six Months ----------------------------------------------------------- Ended June 30, Ended June 30, ----------------------------------------------------------- 1996 1995 1996 1995 ----------------------------------------------------------- (In thousands, except percentages) Pounds of Metal Processed 372,080 314,998 739,045 619,529 Percentage of Pounds Tolled 81% 96% 84% 96% Revenues $ 50,465 $ 29,725 $ 101,183 $ 60,471 Gross Profit $ 7,807 $ 7,315 $ 15,697 $ 14,750 - ------------------------------------------------------------------------------------------------------
RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THREE MONTHS ENDED JUNE 30, 1995 AND SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995 The Company processed 18% more metal for the three month period and 19% more metal in the six month period, both ending June 30, 1996 than it did in the same periods of 1995. Aluminum processing at the Company's newest facilities in Bedford, Indiana, Sikeston, Missouri, and Chicago Heights, Illinois which were all purchased at the beginning of the fourth quarter 1995, was the major reason for these increases. The Loudon, Tennessee plant processing also increased significantly in these periods and contributed to the gains mentioned above. Partially offsetting these increases, however, were the results from the Corona, California plant, where year-to-date processing was more than 42% lower than in the comparable period of 1995 due to unfavorable market conditions on the U.S. West Coast for recycling used beverage containers (UBC's). The Company's other aluminum plants processed approximately the same amount of material in both the three and six month periods ending June 30, 1996 as they did in the same periods of 1995. Revenues increased 70% in 1996's second quarter ending June 30, 1996 compared to 1995's second quarter and increased 67% for the six month period ending the same date. These increases in revenues are higher than the increases in processing volumes discussed above because most of the increased processing volume was due to buy/sell business. As discussed previously, increases in buy/sell business will generally result in a much higher increase in revenue than would an increase in tolling. The Company's buy/sell business revenues include the cost of the metal, the processing cost, and the Company's profit margin in the selling price, whereas, revenues associated with tolling only include the processing cost and the Company's profit margin. In 1996 the Company is expected to generate a higher level of buy/sell business and a correspondingly higher amount of revenues because of the acquisition of its Chicago Heights, Illinois and Sikeston, Missouri plants in 1995 which have historically had approximately 50% of their business in buy/sell transactions. In addition to increases in buy/sell business, it is expected that the Company, in 1996 and beyond, will have additional metal for sale due to operation of its salt cake processing facility which was completed in January 1996. This facility, which is located adjacent to the Company's Morgantown, Kentucky plant, will process much of the Company's salt cake generated from its aluminum recycling plants and recover additional amounts of aluminum for resale. Tolling activity represented 81% and 84% of the Company's processing for the three and six month periods ending June 30, 1996, compared to 96% for both the comparable three and six month periods of 1995. The Company currently believes that the ratio of tolling to buy/sell business in 1996 will more accurately reflect the levels which can be expected in future periods. Magnesium revenues and volumes processed were about 45% and 19% higher, respectively for the first six months of 1996 than for the corresponding period of 1995. This was due to a higher level of anode production and to higher prices for the anodes sold in 1996 compared to 1995. Zinc revenues increased about 23% while volume decreased 5% for the first half ending June 30, 1996 compared to 1995. The decrease in zinc processing volumes was not unexpected due to a record year in 1995 and did not reflect any major change in profitability. The increases in zinc revenues were due to increases in buy/sell business. Some customers which were previously tolling their material opted to change to a buy/sell basis, and this has the effect of increasing revenues as discussed above. Gross profit increased to $7,807,000 for the three months and $15,697,000 for the six months ending June 30, 1996. Compared to $7,315,000 and $14,750,000, these represented 7% and 6% increases, respectively, for the same periods of 1995. These increased profits did not match the increases in processing volumes due to higher costs of operations, particularly natural gas costs and because the Corona and Bedford plants experienced lower operating rates than anticipated. The Bedford operating rate improved in the second quarter, and is expected to improve further in the third quarter; however, the operating rate at the Corona plant is not expected to increase significantly for the immediate future. In addition, gross profit was negatively impacted in the first half of 1996 by falling prices for aluminum. As discussed above, the Company has more buy/sell pounds in its product mix and declining aluminum prices will tend to decrease the level of revenues and gross profits the Company receives for the metal it owns, processes and sells. Selling, general and administrative expenses were $2,888,000 for the three month period and $5,869,000 for the six month period ending June 30, 1996. These compared to $2,252,000 and $4,647,000 for the same periods of 1995. Increased employee costs due mostly to the fourth quarter 1995 acquisitions were the principal contributors to this increase. Equity earnings of joint ventures of $116,000 for the second quarter of 1996 and $423,000 for the first six months of 1996 represent earnings from the Company's joint venture in Germany and its investment in Marport Smelting, acquired in late 1995. There were no comparable amounts in 1995. Net Interest was an expense of $742,000 for the second quarter and $1,208,000 year-to-date 1996. This compares to interest expense of $130,000 and $346,000 respectively for the same periods of 1995. Interest was higher due to higher amounts of debt outstanding in 1996 than in 1995. See "LIQUIDITY AND CAPITAL RESOURCES". Income before the provision for tax of $4,293,000 in 1996's second quarter was 13% or $640,000 below 1995's second quarter, while for the first six months of 1996 income before tax of $9,043,000 was $714,000 or 7% below 1995's amounts. The Company's effective income tax rate is about 39% for 1996 which was about 1% lower than for similar periods in 1995. As a result of all of the above, the Company reported net earnings of $2,598,000 for the second quarter of 1996, and $5,561,000 year-to-date 1996, or 12% and 5% respectively, lower, than the comparable 1995 periods. LIQUIDITY AND CAPITAL RESOURCES Operations used cash of $173,000 during the first half of 1996, compared to providing cash of $12,119,000 in the same period of 1995. Changes in working capital account for virtually all of the difference. In 1996 working capital items other than cash used $12,100,000 of cash while in 1995 working capital provided cash of $488,000. The change in usage of working capital was due to the increases in buy/sell activity as described previously. The Company's total capital spending for property, plant and equipment in the first half of 1996 was $4,480,000, compared to $4,373,000 spent in the first half of 1995. In addition, the Company spent over $13,000,000 for the purchase of a 50% interest in a joint venture with VAW. See NOTE C - LONG-TERM DEBT. Capital expenditures for 1996 are expected to be approximately $20,000,000. The majority of this spending will be in connection with the new aluminum recycling facility the Company is constructing at Coldwater, Michigan. The Company will own 75% of this facility which will principally serve the automotive markets. Construction is expected to be completed in early 1997. Early in May 1996 the Company funded its portion of the equity joint venture with VAW. The joint venture, VAW-IMCO, has the capacity to process 220 million pounds of aluminum annually. Income from this joint venture is recorded on the Company's books as equity income. On April 1, 1996 the Company borrowed $15,000,000 under terms previously negotiated with The Mutual Life Insurance Company of New York. Most of these proceeds were used to fund the Company's portion of the VAW-IMCO joint venture. On May 8, 1996, the Company borrowed the net proceeds of approximately $5,569,000 from the issuance of $5,740,000 principal amount of Solid Waste Disposal Facilities Revenue Bonds by the City of Morgantown, Kentucky. These bonds were issued in connection with the Company's construction of its salt cake processing plant at Morgantown, which was completed in January 1996. See "RESULTS OF OPERATIONS". Financing activities in the first half of 1996 also included the repayment of $1,061,000 in long-term debt and the payment of $1,183,000 in dividends. The Company feels that its cash on hand, the availability of funds under its lines of credit and its anticipated internally generated funds will be sufficient to fund its current needs and meet its obligations for the foreseeable future. At June 30, 1996, the relationship of current assets to current liabilities, or current ratio, was 3.61 to 1, compared to 2.41 to 1 at December 31, 1995. Working capital will fluctuate as the mix of buy/sell business and tolling business changes relative to the total business, for the reasons discussed above. Certain information contained herein may be deemed to be forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, including without limitation, any statements concerning expectations of operating levels at the Company's Bedford, Indiana and Corona, California facilities, expectations of the future mix of buy/sell business as opposed to tolling business and future levels and timing of capital expenditures. Actual results could differ materially from those expectations expressed in such forward-looking statements. Such statements are qualified by the following disclaimers: Estimates of future operating rates at the Company's plants are based on current expectations by management of the Company of future levels of volumes and prices for the Company's services or metal, and are subject to fluctuations in customer demand for the Company's services and prevailing conditions in the metal markets, as well as certain components of the Company's cost of operations, including energy costs. Many of the factors affecting revenues and costs are outside of the control of the Company, including weather conditions such as that prevailed in the first quarter of 1996. The future mix of buy/sell vs. tolling business is dependent on customers' needs and overall demand, world and U.S. market conditions then prevailing in the respective metal markets, and the operating levels at the Company's various facilities at the relevant time. REVIEW BY INDEPENDENT ACCOUNTANTS The Company's independent accountants, Ernst & Young LLP, have reviewed the Company's consolidated financial statements at June 30, 1996, and for the six months then ended prior to filing and their report is included herein. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The annual meeting of the Stockholders of the Company was held on May 14, 1996, at which the election of three Class III directors, the appointment of Ernst & Young LLP as the Company's independent accountants for 1996, amendments to the Company's 1992 Stock Option Plan and the adoption of the Company's Annual Incentive Program were voted on. Jack M. Brundrett was re- elected as a director , and received 8,699,854 votes for his election with 69,955 votes withheld. Ralph L. Cheek was re-elected as a director, and received 8,718,644 votes for his election with 51,165 votes withheld. Jack C. Page was re-elected as a director, and received 8,700,254 votes for his election with 69,555 votes withheld. Ernst & Young was ratified as independent accountants for 1996 with 8,736,413 votes for their ratification, 8,481 votes against and 24,915 votes abstaining. The amendments to the Company's 1992 Stock Option Plan were approved with 8,059,809 votes approving, 234,029 against, and 66,507 votes abstaining. The Company's Annual Incentive Program was approved with 6,809,751 votes approving, 1,488,486 against, and 62,108 votes abstaining. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) The following exhibits are included herein: 10.1 Amendment to the Company's 1992 Stock Option Plan as amended December 15, 1994 10.2 The Company's Annual Incentive Program, filed as Exhibit 4.2 to the Company's registration statement on Form S-8 (No. 333-07091) dated June 28, 1996 and incorporated herein by reference. 15.1 Acknowledgment letter regarding unaudited financial information from Ernst & Young LLP. 27 Financial Data Schedule (b) Reports on Form 8-K - None. SIGNATURE 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. IMCO Recycling Inc. Date: August 13, 1996 By: /s/ Robert R. Holian --------------------------------- Robert R. Holian Vice President and Controller (Principal Accounting Officer) INDEPENDENT ACCOUNTANTS' REVIEW REPORT Stockholders and Board of Directors IMCO Recycling Inc. We have reviewed the accompanying consolidated balance sheet of IMCO Recycling Inc. as of June 30, 1996, and the related consolidated statements of earnings for the three-month and six-month periods ended June 30, 1996 and 1995, and the 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 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 IMCO Recycling Inc. as of December 31, 1996 and the related consolidated statements of earnings, stockholders' equity, and cash flows for the year then ended (not presented herein), and in our report dated February 5, 1996, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated condensed 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. Dallas, Texas July 29, 1996 EX-15.1 2 EXHIBIT 15.1 Stockholders and Board of Directors IMCO Recycling Inc. We are aware of the incorporation by reference in the Registration Statement (Form S-8 No. 33-26641) pertaining to the Nonqualified Stock Option Plan of IMCO Recycling Inc. and the related prospectus, in the Registration Statement (Form S-8 No. 33-34745) pertaining to the IMCO Recycling Amended and Restated Stock Option Plan, in the Registration Statement (Form S-8 No. 33-76780) pertaining to the IMCO Recycling Inc. 1992 Stock Option Plan, in the Registration Statement (Form S-8 No. 333-00075) pertaining to the IMCO Recycling Inc. Amended and Restated 1992 Stock Option Plan, and the in the Registration Statement (Form S-8 No. 333-07091) pertaining to the IMCO Recycling Inc. Annual Incentive Plan of our report dated July 29, 1996 relating to the unaudited condensed consolidated interim financial statements of IMCO Recycling Inc. which are included in its Form 10-Q for the quarter ended June 30, 1996. Pursuant to Rule 346(c) of the Securities Act of 1933, our report is not a part of the Registration statements prepared or certified by accountants within the meaning of Section 7 or 11 of the Securities Act of 1933. August 13, 1996 Dallas, Texas EX-27 3 EXHIBIT 27
5 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 9,075 0 28,147 0 15,808 55,904 115,978 (38,043) 159,876 15,480 49,185 0 0 1,201 86,991 159,876 101,183 101,183 85,486 85,486 5,869 0 1,590 9,043 3,482 5,561 0 0 0 5,561 .45 .45
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