-----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, QApKblaYhw1LAukKvxUDgjcY1nN8AKxS28GbwFD+pncNxkp8ivtv4X8xgJ+i45qu YF2D/xzbdJN2NotJtdBdxQ== 0000950134-96-000397.txt : 19960216 0000950134-96-000397.hdr.sgml : 19960216 ACCESSION NUMBER: 0000950134-96-000397 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960213 SROS: CSX SROS: NYSE SROS: PHLX SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST MISSISSIPPI CORP CENTRAL INDEX KEY: 0000036537 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 640354930 STATE OF INCORPORATION: MS FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07488 FILM NUMBER: 96517743 BUSINESS ADDRESS: STREET 1: 700 NORTH ST/PO BOX 1249 CITY: JACKSON STATE: MS ZIP: 39215 BUSINESS PHONE: 6019487550 MAIL ADDRESS: STREET 2: 700 NORTH ST PO BOX 1249 CITY: JACKSON STATE: MS ZIP: 39202 10-Q 1 FORM 10-Q 1 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 December 31, 1995 --------------------- 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: 1-7488 ------------ First Mississippi Corporation - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Mississippi 64-0354930 - -------------------------------------------------------------------------------- (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 January 31, 1996 ------------------------------- ---------------------------------- Common Stock, $1 Par Value 20,584,991 2 Item 1. Financial Statements First Mississippi Corporation Consolidated Balance Sheets (Unaudited) (In Thousands of Dollars)
Dec. 31 June 30 1995 1995 ------------ ----------- Assets: Current assets Cash and short-term investments $ 44,748 40,523 Accounts receivable 82,653 71,645 Inventories: Finished products 26,930 24,850 Work in process 24,661 19,051 Raw materials and supplies 22,046 20,544 Product exchange agreements 19 - ------------ --------- Total inventories 73,656 64,445 Prepaid expenses and other current assets 10,745 11,218 Net current assets of discontinued operations - 4,904 ------------ --------- Total current assets 211,802 192,735 ------------ --------- Investments and other assets 63,496 38,829 Property, plant and equipment 301,535 282,433 Less: accumulated depreciation, depletion and amortization 146,888 136,969 ------------ --------- 154,647 145,464 Non current assets of discontinued operations - 67,689 ------------ --------- $ 429,945 444,717 ============ ========= Liabilities and Stockholders' Equity: Current liabilities Current instalments of long-term debt $ 15,365 15,076 Deferred revenue 3,557 2,048 Accounts payable 44,761 45,576 Accrued expenses and other current liabilities 21,110 19,928 ------------ --------- Total current liabilities 84,793 82,628 ------------ --------- Long-term debt 82,871 84,394 Deferred revenue and other liabilities 12,791 12,289 Deferred taxes 22,733 23,377 Long-term liab./Minority interest of discontinued operations - 9,033 Stockholders' equity: Common stock 20,585 20,438 Additional paid-in capital 14,202 7,656 Retained earnings 191,970 204,902 ------------ --------- Total stockholders' equity 226,757 232,996 ------------ --------- $ 429,945 444,717 ============ =========
The accompanying notes are an integral part of these financial statements. 3 First Mississippi Corporation Consolidated Statements of Operations (Unaudited) (In Thousands of Dollars, Except Per Share Amounts)
3 Months Ended 6 Months Ended Dec. 31 Dec. 31 --------------------- -------------------- 1995 1994 1995 1994 --------- ---------- --------- --------- Revenues: Sales $ 142,338 126,125 284,569 261,079 Loss on investments - (19) - (19) Interest and other income 1,528 1,170 3,895 1,968 ----------- -------- -------- -------- 143,866 127,276 288,464 263,028 ----------- -------- -------- -------- Costs and expenses: Cost of sales 101,739 88,612 204,366 185,358 General, selling and administrative expenses 14,039 11,394 30,078 22,698 Other operating expenses 1,381 1,770 3,024 3,457 Interest expense 2,355 2,381 4,724 4,829 ----------- -------- -------- -------- 119,514 104,157 242,192 216,342 ----------- -------- -------- -------- Earnings before income taxes 24,352 23,119 46,272 46,686 Income tax expense 9,500 9,335 18,050 18,560 Equity in net earnings of equity investees 306 148 499 263 ----------- -------- -------- -------- Earnings from continuing operations $ 15,158 13,932 28,721 28,389 Loss from discontinued operations, net - (990) (1,083) (424) ----------- -------- -------- -------- Net earnings $ 15,158 12,942 27,638 27,965 =========== ======== ======== ======== Earnings (loss) per common share: Continuing operations $ 0.72 0.68 1.36 1.38 Discontinued operations - (0.05) (0.05) (0.02) ----------- -------- -------- -------- Earnings per common share $ 0.72 0.63 1.31 1.36 =========== ======== ======== ======== Average shares outstanding 21,105 20,626 21,077 20,509 Cash dividend declared per share $ 0.1000 0.0875 0.2000 0.1625
The accompanying notes are an integral part of these financial statements. 4 First Mississippi Corporation Consolidated Statements of Cash Flows (Unaudited) (In Thousands of Dollars)
6 Months Ended Dec. 31 ------------------------- 1995 1994 --------- --------- Cash flows from operating activities: Net earnings $ 27,638 27,965 Adjustments to reconcile earnings to net cash provided by operating activities: Depreciation, depletion and amortization 10,936 9,832 Deferred taxes and other items 483 17,373 Change in current assets and liabilities, net of effects of dispositions (15,616) (7,202) Net loss of discontinued operations 1,083 424 ------------ -------- Net cash provided by continuing operations 24,479 48,392 Net cash provided by (used in) operating activities of discontinued operations (3,090) 9,840 ------------ -------- Net cash provided by operations 21,389 58,232 ------------ -------- Cash flows from investing activities: Capital expenditures (19,117) (10,001) Collection of note receivable 15,000 - Investment in equity investees, net (3,765) - Other investing activities 298 (319) ------------ -------- Net cash used in investing activities of continuing operations (7,584) (10,320) Net cash used in investing activities of discontinued operations (3,176) (13,456) ------------ -------- Net cash used in investing activities (10,760) (23,776) ------------ -------- Cash flows from financing activities: Principal repayments of long-term debt (547) (6,024) Dividends (4,039) (4,794) Proceeds from issuance of long-term debt - 151 Retirement of common stock (5,479) - Proceeds from issuance of common stock 3,661 1,410 ------------ -------- Net cash used in financing activities (6,404) (9,257) ------------ -------- Net increase in cash and cash equivalents 4,225 25,199 Cash and cash equivalents at beginning of period 40,523 2,973 ------------ -------- Cash and cash equivalents at end of period 44,748 28,172 ============ ======== Supplemental disclosures of cash flow information Cash paid during the period for: Interest, net of amounts capitalized $ 4,983 4,984 ============ ======== Income taxes, net $ 17,410 5,662 ============ ========
The accompanying notes are an integral part of these financial statements. 5 First Mississippi Corporation and Consolidated 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 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 June 30, 1995. NOTE 2 - DISCONTINUED OPERATIONS On September 24, 1995, the board of directors of First Mississippi Corporation approved the distribution of its 14,750,000 common shares of FirstMiss Gold Inc. to its shareholders. First Mississippi received a ruling from the Internal Revenue Service in April 1995, that allowed the distribution with no federal income tax impact to either First Mississippi or its shareholders. The distribution occurred October 20, 1995. The December 31, 1995, consolidated balance sheet reflects the impact of the $31.3 million reduction to retained earnings in connection with the distribution of the FirstMiss Gold stock. Each First Mississippi shareholder received approximately seven-tenths of a common share of FirstMiss Gold Inc. for each share of First Mississippi owned. The net assets and liabilities of the discontinued operations (primarily FirstMiss Gold) have been segregated in the consolidated financial statements presented. The following is the composition of those net assets and liabilities at June 30, 1995: Receivables $ 1,856 Inventories 9,554 Prepaid expenses and other current assets 1,776 Accounts payable (6,522) Accrued expenses and other current liabilities (1,160) --------- Net current assets (liabilities) of discontinued operations $ 4,904 ========= Noncurrent assets of discontinued operations $ 67,689 ========= Long-term liabilities of discontinued operations $ 3,032 Minority interest of discontinued operations 6,001 --------- Long-term liab./minority interest of discontinued operations $ 9,033 =========
6 The statements of operations have been reclassified to separate discontinued and continuing operations. Revenues and net losses of the discontinued operations for the three and six month periods ended December 31, 1995, and December 31, 1994, were as follows:
3 Months Ended 6 Months Ended December 31 December 31 ----------------------- ------------------------- 1995 1994 1995 1994 -------- --------- ---------- ----------- Revenues $ - 17,867 17,961 39,859 ======= ======= ======= Loss before taxes - (2,693) (2,118) (1,621) Income tax benefit - 1,378 750 1,001 Minority interest - 325 285 196 ------- ------- ------- Loss from disc. operations, net of taxes $ - (990) (1,083) (424) ======= ======= =======
NOTE 3 - NONCURRENT NOTE RECEIVABLE Included in investments and other assets at December 31, 1995, is $23.9 million in principal and interest related to a promissory note due September 2000 from FirstMiss Gold Inc. The $52.5 million note balance at the October 20, 1995, spinoff date was reduced in November by FirstMiss Gold by $15.0 million, using proceeds generated from a public stock offering. In addition, the note was offset by $13.9 million, representing payment for tax attributes utilized by First Mississippi. Interest accrues at a LIBOR based rate, currently 6.625%, and is added to the note. Cash advances to FirstMiss Gold for the period July 1, 1995, to October 20, 1996, were $8.9 million. NOTE 4 - COMMITMENTS AND CONTINGENT LIABILITIES At December 31, 1995, the Company had entered hedge contracts representing approximately 20% of anticipated purchases of natural gas related to fertilizer operations for the third quarter of fiscal 1996 as follows:
Delivery Dates Average Price per BTU MBTU (in 10,000s) -------------- --------------------- ----------------- 1/1/96 - 2/29/96 $1.92 130
The net unrealized gain on these natural gas contracts at December 31, 1995, is $1.4 million. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations - Six months ended December 31, 1995 compared to the six months ended December 31, 1994 CONSOLIDATED RESULTS Earnings for the six months ended December 31, 1995 were $27.6 million versus $28.0 million for the same period last year. Earnings were down slightly as improved segment operating results and lower net interest expense was offset by higher unallocated corporate expense. Sales for the year were up 9%, primarily due to higher Combustion, Thermal Plasma and Other sales. SEGMENT OPERATIONS First Mississippi Corporation Industry Segment Information (In Thousands of Dollars)
6 Months Ended December 31 ------------------------- 1995 1994 --------- --------- Sales Chemicals $105,081 100,319 Fertilizer 109,229 107,018 Combustion, Thermal Plasma, and Other 70,259 53,742 -------- -------- Total $284,569 261,079 ======== ======== Operating profit (loss) before income taxes Chemicals $ 21,309 20,608 Fertilizer 38,295 37,084 Combustion, Thermal Plasma, and Other (1,935) (3,797) -------- -------- 57,669 53,965 Unallocated corporate expenses (9,614) (4,033) Interest income (expense), net (1,733) (3,211) Other income (expense), net (50) (35) -------- -------- Total $ 46,272 46,686 ======== ========
Chemicals sales and pretax operating profits were up 5% and 3%, respectively, for the six months primarily due to higher electronic chemicals sales as growth of patented hydroxylamine products used in 8 semiconductor manufacturing remained strong. During the second quarter the company signed a non-binding letter of intent with Bayer Corp. to facilitate negotiation of a definitive agreement under which the company would build and operate a proposed new aniline plant in Baytown, Texas, to supply aniline to Bayer's proposed new MDI (Methylene Diphenol Diisocyanate) complex at Baytown. Bayer's new facility is expected to come on-stream in 1998. Negotiations are in the early stages. Fertilizer pretax operating profit was up 3% for the six months as higher urea prices and lower natural gas cost offset lower ammonia prices. Urea prices were up 32% while ammonia prices declined 10% versus last year. Average natural gas cost was down 10% versus the prior year which included $2.6 million in losses from hedging transactions. Combustion, Thermal Plasma and Other losses for the six months were down 49% versus last year as sales grew 31%. The improvement in sales and operating results is primarily due to higher sales in combustion and steel operations. Unallocated corporate expenses were up $5.6 million over prior year. The increase was primarily due to incentive payments tied to stock appreciation, expenses related to the FirstMiss Gold spinoff and additional corporate expenses following Chemicals' July 1, 1995, restructuring. The incentive program accounted for approximately half of the increase. Net interest expense for the six months was lower versus prior year due to increased interest income. Results of Operations - Three months ended December 31, 1995 compared to the three months ended December 31, 1994 CONSOLIDATED RESULTS Earnings for the three months ended December 31, 1995, were up 17% versus the same period prior year on improved results from continuing operations. In addition, prior year results included $1.0 million losses in discontinued gold operations. Net income from continuing operations was up as a 13% increase in sales offset a decrease in gross margin percentage from 29.7% to 28.5%, primarily due to lower fertilizer unit margins, and higher unallocated corporate expenses. 9 SEGMENT OPERATIONS First Mississippi Corporation Industry Segment Information (In Thousands of Dollars)
3 Months Ended December 31 -------------------------- 1995 1994 ---------- ---------- Sales Chemicals $ 50,737 50,810 Fertilizer 55,744 48,467 Combustion, Thermal Plasma, and Other 35,857 26,848 -------- -------- Total $142,338 126,125 ======== ======== Operating profit (loss) before income taxes Chemicals $ 10,852 10,092 Fertilizer 19,633 18,363 Combustion, Thermal Plasma, and Other (1,133) (1,971) -------- -------- 29,352 26,484 Unallocated corporate expenses (3,929) (1,896) Interest income (expense), net (1,047) (1,415) Other income (expense), net (24) (54) -------- -------- Total $ 24,352 23,119 ======== ========
Chemicals pretax operating profits were up 8% for the quarter despite slightly lower sales due to increased sales of higher margin electronic chemicals. Total chemicals sales were flat as a 79% increase in electronic chemicals sales was offset primarily by lower aniline sales prices and lower intermediate chemicals volume. Fertilizer pretax operating profits were up 7% as a 16% increase in total fertilizer volume more than offset an 8% decrease in average unit price. Average urea prices for the quarter were up 26% over the prior year, while average ammonia prices were down 16%. Ammonia accounted for approximately 78% of total volume for the current quarter versus 74% for the prior year. Despite a 16% increase in the average price of natural gas purchased under short-term contracts and used in production, average natural gas cost for the quarter was down slightly versus the prior year due to $1.9 million in losses from hedging transactions in the prior year. The Company currently has no natural gas futures contracts for months beyond February 1996. Combustion, Thermal Plasma and Other losses for the quarter were down 43% versus last year as sales grew 34%. The improvement is due to improved steel margins and lower losses at aluminum recovery operations. Sales increased on higher combustion and steel sales. Steel sales were up on a 12% increase in sales volume and a 17% increase in average unit price. 10 Unallocated corporate expenses for the current quarter were up $2.0 million over prior year. The increase was primarily due to additional corporate expense following Chemicals' July 1, 1995, restructuring and $0.6 million in credits recorded in the prior year related to benefit plans. Net interest expense for the current quarter was lower versus prior year due to increased interest income. DISCONTINUED OPERATIONS Discontinued operations include the results of FirstMiss Gold Inc. On September 24, 1995, the board of directors of First Mississippi Corporation approved the distribution of its 14,750,000 common shares of FirstMiss Gold Inc. to its shareholders. The stock was distributed to the shareholders of First Mississippi Corporation on October 20, 1995. On September 24, 1995, First Mississippi and FirstMiss Gold entered into certain agreements related to the distribution, which were summarized as part of Form 8-K filed as of that date. CAPITAL RESOURCES AND LIQUIDITY Cash flow from operations was $21.4 million, down from $58.2 million prior year. The decrease from prior year was primarily due to an increase in inventory and receivables and the use of cash in discontinued gold operations. In addition, prior year cash flow included $10.3 million in fertilizer product prepayments. Cash flow used in investing activities was down from the prior year due to the receipt in November 1995 of $15.0 million from FirstMiss Gold related to a promissory note. Cash flow used in financing activities for the current year included $5.5 million for the purchase of 235,400 shares of First Mississippi common stock under the $20.0 million repurchase authorization announced in May 1995. Part II. Other Information Item 4. Submission of Matters to a Vote of Security Holders At the Annual Meeting of Stockholders on November 10, 1995, the Company stockholders, pursuant to proxies solicited under Regulation 14A, elected four directors for terms to expire in 1998, or until their successors are elected and qualify. The following votes were cast: 11 DIRECTORS: Paul A. Becker 16,803,166 shares voted for -------------- 603,608 shares withheld -------------- N/A shares broker nonvotes -------------- James W. Crook 16,802,814 shares voted for -------------- 603,960 shares withheld -------------- N/A shares broker nonvotes -------------- Charles P. Moreton 17,355,288 shares voted for -------------- 51,486 shares withheld -------------- N/A shares broker nonvotes -------------- Leland R. Speed 17,369,334 shares voted for -------------- 37,440 shares withheld -------------- N/A shares broker nonvotes --------------
Also at the Annual Meeting, Company stockholders voted on the proposal to approve the First Mississippi Corporation 1996 Long-Term Incentive plan as follows: 14,370,609 shares voted for ---------- 2,885,480 shares voted against ---------- 150,685 shares withheld ---------- N/A shares broker nonvotes ---------- Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 27.1 Financial Data Schedules Exhibit 27.2 Financial Data Schedules (b) Reports on Form 8-K No reports on Form 8-K were filed for the quarter ending December 31, 1995. 12 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. FIRST MISSISSIPPI CORPORATION February 13, 1996 /s/ J. Kelley Williams - --------------------- ----------------------------------------------- Date J. Kelley Williams Chairman and Chief Executive Officer February 13, 1996 /s/ R. Michael Summerford - --------------------- ----------------------------------------------- Date R. Michael Summerford Vice President & Chief Financial Officer
13 EXHIBIT INDEX EXHIBITS 27.1 - Financial Data Schedules 27.2 - Financial Data Schedules EX-27.1 2 FINANCIAL DATA SCHEDULE 6-MONTH PERIOD
5 1,000 6-MOS JUN-30-1996 JUL-01-1995 DEC-31-1995 44,748 0 83,538 885 73,656 211,802 301,535 146,888 429,945 84,793 82,871 20,585 0 0 206,172 429,945 284,569 288,464 204,366 204,366 3,024 140 4,724 46,272 18,050 28,721 (1,083) 0 0 27,638 1.31 0.00
EX-27.2 3 FINANCIAL DATA SCHEDULE 3-MONTH PERIOD
5 1,000 3-MOS JUN-30-1996 JUL-01-1995 SEP-30-1995 51,240 0 75,431 1,076 70,011 208,417 287,210 142,037 464,665 94,653 83,256 20,635 0 0 227,135 464,665 142,230 144,598 102,627 102,627 1,643 80 2,369 21,920 8,550 13,563 (1,083) 0 0 12,480 0.59 0.00
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