Delaware
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001-05558
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75-1277589
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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o |
Written communications pursuant to Rule 425 under the Securities Act
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o |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
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Item 2.02
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Results of Operations and Financial Condition.
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Item 9.01
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Financial Statements and Exhibits.
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(d)
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Exhibits.
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Exhibit No. | Description | |
99.1 | Press release issued by the Company on March 26, 2012. |
KATY INDUSTRIES, INC.
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(Registrant)
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By: /s/ James W. Shaffer
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James W. Shaffer
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Vice President, Treasurer and Chief Financial Officer
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Date: March 26, 2012
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Exhibit No. | Description | |
99.1 | Press release issued by the Company on March 26, 2012. |
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·
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Net sales in the fourth quarter of 2011 were $26.6 million, a decrease of $0.4 million compared to the same period in 2010. Net sales increased approximately 1.2% due to pricing and currency translation changes which were more than offset by a 2.7% decrease due to volume shortfall in our Continental and Glit business units.
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·
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Gross margin was 8.9% in the fourth quarter of 2011, an increase from 4.2% in the fourth quarter of 2010. The increase was primarily a result of lower headcount, reduced occupancy expense and improved efficiencies resulting from the relocation of our Wilen facility from Atlanta, Georgia to Bridgeton, Missouri, and lower depreciation from assets becoming fully depreciated.
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·
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Selling, general and administrative expenses were $4.4 million for the fourth quarter of 2011 compared to $4.0 million in the fourth quarter of 2010. The variance was primarily due to a greater favorable adjustment made in the prior year than in the current to the self-insurance casualty reserves as a result of favorable claims experience.
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·
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Net sales for the year ended December 31, 2011 were $120.3 million, a decrease of $4.5 million, or 3.6%, compared to 2010. The majority of the decrease was a result of volume shortfall in our Continental and Glit business units, partially due to four less shipping days in 2011 than in 2010 due to inclement weather shutdowns. Net sales increased approximately 2.3% year over year due to pricing and currency translation changes.
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·
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Gross margin was 9.4% for the year ended December 31, 2011, an increase of 1.0 percentage point from the prior year. Gross margin was impacted by an unfavorable variance in our LIFO adjustment of $0.3 million resulting from an increase in resin prices and inventory levels. Excluding the LIFO adjustment, gross margin for the year ended December 31, 2011 increased 1.3 percentage points from the prior year. The increase was primarily a result of improved efficiencies in our Wilen operations after the relocation of this operation from Atlanta, Georgia to Bridgeton, Missouri in 2010 and lower depreciation from assets becoming fully depreciated, as well as pricing as noted above. As a result, our gross profit increased $0.8 million from $10.5 million to $11.3 million.
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·
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Selling, general and administrative expenses were $18.3 million for the year ended December 31, 2011, a $1.0 million reduction from the prior year. The decrease was primarily due to lower stock-based compensation expense due to our lower stock price and the reversal of prior years’ compensation expense as a result of cancelled unvested options in 2011, and reduced headcount as a result of cost-cutting efforts.
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Three Months Ended
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Twelve Months Ended
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December 31,
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December 31,
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December 31,
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December 31,
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|||||||||||||
2011
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2010
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2011
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2010
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|||||||||||||
Net sales
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$ | 26,575 | $ | 26,982 | $ | 120,321 | $ | 124,761 | ||||||||
Cost of goods sold
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24,205 | 25,847 | 109,034 | 114,234 | ||||||||||||
Gross profit
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2,370 | 1,135 | 11,287 | 10,527 | ||||||||||||
Selling, general and administrative expenses
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4,368 | 4,003 | 18,297 | 19,289 | ||||||||||||
Severance, restructuring and related charges
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24 | 275 | 417 | 1,277 | ||||||||||||
Loss (gain) on disposal of assets
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42 | (27 | ) | 58 | (216 | ) | ||||||||||
Operating loss
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(2,064 | ) | (3,116 | ) | (7,485 | ) | (9,823 | ) | ||||||||
Interest expense
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(663 | ) | (357 | ) | (2,055 | ) | (1,528 | ) | ||||||||
Other, net
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142 | (234 | ) | 175 | 2,232 | |||||||||||
Loss from continuing operations before income tax (expense) benefit
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(2,585 | ) | (3,707 | ) | (9,365 | ) | (9,119 | ) | ||||||||
Income tax (expense) benefit from continuing operations
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(9 | ) | (10 | ) | 230 | 491 | ||||||||||
Loss from continuing operations
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(2,594 | ) | (3,717 | ) | (9,135 | ) | (8,628 | ) | ||||||||
(Loss) income from operations of discontinued business (net of tax)
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(9 | ) | 888 | 2,843 | 3,561 | |||||||||||
Gain on sale of discontinued business (net of tax)
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11,099 | - | 11,099 | - | ||||||||||||
Net income (loss)
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$ | 8,496 | $ | (2,829 | ) | $ | 4,807 | $ | (5,067 | ) | ||||||
Net income (loss) per share of common stock - Basic:
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Loss from continuing operations
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$ | (0.33 | ) | $ | (0.47 | ) | $ | (1.15 | ) | $ | (1.09 | ) | ||||
Discontinued operations
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1.40 | 0.11 | 1.75 | 0.45 | ||||||||||||
Net income (loss)
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$ | 1.07 | $ | (0.36 | ) | $ | 0.60 | $ | (0.64 | ) | ||||||
Net income (loss) per share of common stock - Diluted:
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Loss from continuing operations
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$ | (0.09 | ) | $ | (0.47 | ) | $ | (0.34 | ) | $ | (1.09 | ) | ||||
Discontinued operations
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0.41 | 0.11 | $ | 0.52 | 0.45 | |||||||||||
Net income (loss)
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$ | 0.32 | $ | (0.36 | ) | $ | 0.18 | $ | (0.64 | ) | ||||||
Weighted average common shares outstanding:
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Basic
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7,951 | 7,951 | 7,951 | 7,951 | ||||||||||||
Diluted
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26,810 | 7,951 | 26,810 | 7,951 | ||||||||||||
Other Information:
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LIFO adjustment expense
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$ | (180 | ) | $ | (377 | ) | $ | 687 | $ | 338 |
December 31,
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December 31,
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Assets
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2011
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2010
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Current assets:
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Cash
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$ | 730 | $ | 1,319 | ||||
Accounts receivable, net
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11,759 | 11,508 | ||||||
Inventories, net
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17,262 | 15,009 | ||||||
Other current assets
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4,086 | 1,496 | ||||||
Assets held for sale
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- | 4,293 | ||||||
Total current assets
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33,837 | 33,625 | ||||||
Other assets:
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Goodwill
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665 | 665 | ||||||
Intangibles, net
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2,478 | 2,832 | ||||||
Other
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2,032 | 3,160 | ||||||
Total other assets
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5,175 | 6,657 | ||||||
Property and equipment
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96,363 | 98,614 | ||||||
Less: accumulated depreciation
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(77,562 | ) | (76,002 | ) | ||||
Property and equipment, net
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18,801 | 22,612 | ||||||
Total assets
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$ | 57,813 | $ | 62,894 | ||||
Liabilities and stockholders' equity
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Current liabilities:
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Accounts payable
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$ | 8,928 | $ | 10,619 | ||||
Book overdraft
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946 | 1,257 | ||||||
Accrued expenses
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10,018 | 11,952 | ||||||
Payable to related party
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1,750 | 500 | ||||||
Deferred revenue
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688 | - | ||||||
Current maturities of long-term debt
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- | 1,275 | ||||||
Revolving credit agreement
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14,359 | 15,432 | ||||||
Liabilities held for sale
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- | 1,345 | ||||||
Total current liabilities
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36,689 | 42,380 | ||||||
Long-term debt, less current maturities
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- | 6,169 | ||||||
Deferred revenue
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2,605 | - | ||||||
Other liabilities
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5,904 | 5,306 | ||||||
Total liabilities
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45,198 | 53,855 | ||||||
Stockholders' equity:
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Convertible preferred stock
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108,256 | 108,256 | ||||||
Common stock
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9,822 | 9,822 | ||||||
Additional paid-in capital
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27,110 | 27,385 | ||||||
Accumulated other comprehensive loss
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(2,361 | ) | (1,405 | ) | ||||
Accumulated deficit
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(108,775 | ) | (113,582 | ) | ||||
Treasury stock
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(21,437 | ) | (21,437 | ) | ||||
Total stockholders' equity
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12,615 | 9,039 | ||||||
Total liabilities and stockholders' equity
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$ | 57,813 | $ | 62,894 |
Twelve Months Ended
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December 31,
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December 31,
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2011
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2010
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Cash flows from operating activities:
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Net income (loss)
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$ | 4,807 | $ | (5,067 | ) | |||
Income from discontinued operations
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(13,942 | ) | (3,561 | ) | ||||
Loss from continuing operations
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(9,135 | ) | (8,628 | ) | ||||
Depreciation and amortization
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4,755 | 6,451 | ||||||
Write-off and amortization of debt issuance costs
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938 | 470 | ||||||
Stock-based compensation
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(570 | ) | (66 | ) | ||||
Loss (gain) on sale or disposal of assets
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58 | (216 | ) | |||||
Gain on settlement of existing obligation
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- | (2,100 | ) | |||||
(3,954 | ) | (4,089 | ) | |||||
Changes in operating assets and liabilities:
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Accounts receivable
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(274 | ) | (798 | ) | ||||
Inventories
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(2,296 | ) | (85 | ) | ||||
Other assets
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(1,357 | ) | (423 | ) | ||||
Accounts payable
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(1,699 | ) | 1,663 | |||||
Accrued expenses
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(1,890 | ) | (2,097 | ) | ||||
Payable to related party
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1,250 | - | ||||||
Other
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(367 | ) | (3,126 | ) | ||||
(6,633 | ) | (4,866 | ) | |||||
Net cash used in continuing operations
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(10,587 | ) | (8,955 | ) | ||||
Net cash provided by discontinued operations
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3,132 | 3,745 | ||||||
Net cash used in operating activities
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(7,455 | ) | (5,210 | ) | ||||
Cash flows from investing activities:
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Capital expenditures
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(503 | ) | (914 | ) | ||||
Proceeds from sale of assets
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82 | 351 | ||||||
Net cash used in continuing operations
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(421 | ) | (563 | ) | ||||
Net cash provided by (used in) discontinued operations
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16,670 | (28 | ) | |||||
Net cash used in investing activities
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16,249 | (591 | ) | |||||
Cash flows from financing activities:
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Net (repayments) borrowings
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(1,048 | ) | 6,529 | |||||
Decrease in book overdraft
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(311 | ) | (28 | ) | ||||
Proceeds from term loans
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- | 8,182 | ||||||
Repayments of term loans
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(7,444 | ) | (7,637 | ) | ||||
Direct costs associated with debt facilities
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(692 | ) | (775 | ) | ||||
Net cash (used in) provided by financing activities
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(9,495 | ) | 6,271 | |||||
Effect of exchange rate changes on cash
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112 | 102 | ||||||
Net (decrease) increase in cash
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(589 | ) | 572 | |||||
Cash, beginning of period
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1,319 | 747 | ||||||
Cash, end of period
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$ | 730 | $ | 1,319 | ||||
Reconciliation of free cash flow to GAAP Results:
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Net cash used in operating activities
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$ | (7,455 | ) | $ | (5,210 | ) | ||
Capital expenditures
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(503 | ) | (914 | ) | ||||
Free cash flow
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$ | (7,958 | ) | $ | (6,124 | ) |