EX-99.1 3 d58908_ex99-1.txt PRESS RELEASE Exhibit 99.1 KATY NEWS FOR IMMEDIATE RELEASE KATY INDUSTRIES, INC. REPORTS 2003 FOURTH QUARTER RESULTS o Sales grow 7.2% in fourth quarter o Gross margins improving and administrative expenses decreasing o Restructuring expected to be completed by July 2004 MIDDLEBURY, CT - March 10, 2004 - Katy Industries, Inc. (NYSE: KT) today reported income from continuing operations in the fourth quarter of 2003 of $3.8 million, or $0.48 per share, versus a loss from continuing operations of ($0.2) million, or ($0.03) per share, in the fourth quarter of 2002, excluding restructuring and other non-recurring or unusual items, which are discussed below. Including these items, Katy reported a net loss attributable to common shareholders of ($5.4) million, or ($0.68) per share, in the fourth quarter of 2003, versus a net loss attributable to common shareholders of ($25.1) million, or ($3.00) per share, in the same period of 2002. Net sales in the fourth quarter of 2003 were $118.6 million, up 7.2% compared to the same period in 2002. Earnings before interest, taxes, depreciation and amortization (EBITDA), excluding all restructuring and other non-recurring or unusual items, was $13.0 million in the fourth quarter of 2003, compared to $5.9 million in the same period in 2002. EBITDA, As Adjusted, and Income (Loss) From Continuing Operations, As Adjusted are Non-GAAP Financial Measures and are further discussed below. Katy also reported income from continuing operations for the twelve months ended December 31, 2003 of $2.3 million, or $0.28 per share, versus a loss from continuing operations of ($0.1) million, or ($0.02) per share, in the same period of 2002, excluding restructuring and other non-recurring or unusual items, which are discussed below. Including these items, Katy reported a net loss attributable to common shareholders of ($15.6) million, or ($1.90) per share, in the twelve months ended December 31, 2003, versus a net loss attributable to common shareholders of ($67.9) million, or ($8.11) per share, in the same period of 2002. Net sales in the twelve months ended December 31, 2003 were $436.4 million, down 1.8% from the same period in 2002 (excluding SESCO, a business which was exited in April 2002). EBITDA, excluding all restructuring and other non-recurring or unusual items, was $31.9 million in the twelve months ended December 31, 2003, compared to $27.7 million for the same period in 2002. During the fourth quarter of 2003, Katy reported restructuring and other non-recurring or unusual items of ($8.1) million pre-tax [($1.02) per share], including impairments of long-lived assets of ($4.8) million, severance, restructuring and related costs of ($2.3) million, and the net write off of receivables from businesses disposed of prior to 2002 of ($1.0) million. Katy also recorded the impact of paid-in-kind dividends earned on convertible preferred stock of ($3.5) million [($0.44) per share]. During the fourth quarter of 2002, Katy reported restructuring and other non-recurring or unusual items of ($11.4) million pre-tax [($1.36) per share], including impairments of long-lived assets of ($7.8) million and severance, restructuring and related costs of ($3.6) million. Also during the fourth quarter of 2002, Katy reported results from discontinued operations of ($5.7) million, net of tax [($0.68) per share], a cumulative effect of a change in accounting principle of $1.7 million [$0.20 per share], as well as the impact of paid-in-kind dividends earned on convertible preferred stock of ($3.3) million [($0.39) per share]. Details regarding these items are provided in the "Reconciliations of GAAP Results to Results Excluding Certain Unusual Items" accompanying this press release. For the twelve months ended December 31, 2003, Katy reported restructuring and other non-recurring or unusual items of ($25.7) million pre-tax [($3.13) per share], including impairments of long-lived assets of ($11.9) million, severance, restructuring and related costs of ($8.1) million, a write down of its equity investment in Sahlman Holding Company, Inc. of ($5.5 million), the net write off of receivables from businesses disposed of prior to 2002 of ($0.7) million and a net gain on the sale of real estate of $0.5 million. Katy also reported results of discontinued operations of $9.5 million, net of tax [$1.16 per share], a gain on the early redemption of a preferred interest in a subsidiary of $6.6 million, net of tax [$0.80 per share], and the impact of paid-in-kind dividends earned on convertible preferred stock of ($12.8) million [($1.56) per share]. During the twelve months ended December 31, 2002, Katy reported restructuring and other non-recurring or unusual items of ($46.4) million pre-tax [($5.54) per share], including impairments of long-lived assets of ($21.2) million, severance, restructuring and related costs of ($19.2) million, and a loss on exit of the SESCO business of ($6.0) million. Also during the twelve months ended December 31, 2002, Katy reported results of discontinued operations of ($1.2) million, net of tax [($0.14) per share], a cumulative effect of a change in accounting principle of ($2.5) million [($0.30) per share], as well as the impact of paid-in-kind dividends earned on convertible preferred stock of ($11.1) million [($1.33) per share]. Details regarding these items are provided in the "Reconciliations of GAAP Results to Results Excluding Certain Unusual Items" accompanying this press release. "With our restructuring initiatives nearly complete, our focus has shifted to revenue growth through new products, new distribution channels and acquisitions," said C. Michael Jacobi, Katy Industries' President and Chief Executive Officer. "We are experiencing price increases in raw materials that must be offset through further cost reductions and price increases on our products. Instead of major restructuring programs, our cost reductions will come from the elimination of all types of waste, product redesigns, procurement strategies and lean administration" added Mr. Jacobi. Gross margins were 18.9% in the fourth quarter of 2003, an increase of 140 basis points from the fourth quarter of 2002. The favorable impact of restructuring and cost containment was offset partially by higher resin costs. Selling, general and administrative expenses were lower by $2.9 million in the fourth quarter of 2003 and were significantly lower as a percentage of sales [11.9%] in the fourth quarter of 2003, compared to 15.4% for the same period of 2002. Interest, net increased by $0.1 million in the fourth quarter of 2003 versus the same period of 2002, as the write-off of unamortized debt costs of $0.7 million was partially offset by lower levels of borrowings and lower interest rates. Debt at December 31, 2003 was $39.7 million [28% of total capitalization], versus $45.5 million [31% of total capitalization] at December 31, 2002. Cash on hand at December 31, 2003 was $6.7 million, versus $4.8 million at December 31, 2002. Liquidity was negatively impacted during the year ended December 31, 2003, as Katy used free cash flow of $5.4 million versus $21.8 million of free cash flow generated during the twelve months ended December 31, 2002. Katy defines free cash flow, a non-GAAP financial measure which is discussed further below, as cash generated from operations less capital expenditures and cash dividends. Contributing to the use of free cash flow during the twelve months of 2003 were payments on previously recorded restructuring liabilities and higher accounts receivable balances. Also during 2003, liquidity benefited from the sale of GC/Waldom Electronics, Inc. (GC/Waldom) and Duckback Products, Inc. (Duckback) which together generated $23.6 million in net proceeds that were used to pay down a portion of Katy's indebtedness. Katy expects to continue to incur costs associated with restructuring initiatives through the first half of 2004. Capital expenditures, severance, restructuring and related costs, and potential asset impairments related to these initiatives are expected to be in the range of $4 to $6 million. Payment-in-kind dividends on convertible preferred stock will end in December 2004, or upon the conversion of the convertible preferred stock, whichever is sooner. Katy has completed the following sales of non-core businesses: Duckback on September 16, 2003, GC/Waldom on April 2, 2003, and Hamilton Precision Metals, L.P. on October 31, 2002. The results of these businesses have been classified as discontinued operations for all periods presented. Tax Effect of Discontinued Operations - Third Quarter Reclassification Katy has determined that its tax provision should be reallocated among continuing operations and discontinued operations in the third quarter of 2003. Katy will amend its previously filed Form 10-Q for the fiscal quarter ended September 30, 2003 to reflect this reallocation. These revisions have no effect on Katy's balance sheet, statement of cash flows, net sales, operating income, or net loss attributable to common shareholders (and related per share amounts) previously reported in the 2003 third quarter Form 10-Q. Specifically, Katy has determined that the amount of the gain on sale of discontinued businesses and the income from operations of discontinued businesses previously reported in the third quarter of fiscal 2003 should be restated to reflect reductions of $3.8 million and $0.3 million, respectively, for a tax provision allocable to each of those amounts. This revision will also adjust the provision for income taxes from a provision of $0.9 million to a benefit from income taxes of $3.2 million. The revision reduces the previously reported basic and diluted loss per share amounts from continuing operations attributable to common stockholders for the three months ended September 30, 2003 by $0.49 and reduces basic and diluted income per share amounts from discontinued operations for the same period by $0.49. Katy has also determined that the amount of the gain on sale of discontinued businesses and the income from operations of discontinued businesses previously reported for the nine months ended September 30, 2003 should be restated to reflect reductions of $3.8 million and $1.1 million, respectively, for a tax provision allocable to each of those amounts. This revision will also adjust the provision for income taxes from a provision of $1.8 million to a benefit from income taxes of $3.1 million. The revision reduces the previously reported basic and diluted loss per share amounts from continuing operations attributable to common stockholders for the nine months ended September 30, 2003 by $0.59 and reduces basic and diluted income per share amounts from discontinued operations for the same period by $0.59. Non-GAAP Financial Measures To provide transparency about measures of Katy's financial performance which management considers most relevant, we supplement the reporting of Katy's consolidated financial information under GAAP with certain non-GAAP financial measures, including EBITDA, as adjusted; free cash flow; and income (loss) from continuing operations, as adjusted. Details regarding these measures and reconciliations of these non-GAAP measures to comparable GAAP measures is provided in the "Reconciliations of GAAP Results to Results Excluding Certain Unusual Items" and "Statement of Cash Flows" accompanying this press release. These measures should not be considered in isolation or as an alternative to measures determined in accordance with GAAP. Katy believes the presentation of these measures is nonetheless useful to investors for the following reasons: EBITDA, As Adjusted. EBITDA, as adjusted, is calculated as earnings before interest, taxes, depreciation and amortization, excluding discontinued operations and unusual items such as severance, restructuring and related costs, impairments of long-lived assets, and other non-recurring items. Katy believes that EBITDA, as adjusted, is useful to report because it (i) is used extensively on an internal basis, acting as a primary metric for operating performance measurement, (ii) is the prime measure of operating results used by the lenders in Katy's bank group when evaluating Katy's performance and (iii) provides a link between profitability and operating cash flow. The presentation of EBITDA, as adjusted, enables the investor to view Katy's performance in a manner similar to the method used by management. Free Cash Flow. Free cash flow is defined by Katy as cash flow from operations less capital expenditures and cash dividends paid. Katy believes that free cash flow is useful to management and investors in measuring cash generated that is available for repayment of debt obligations, investment in growth through acquisitions, new business development and stock repurchases. Income (Loss) From Continuing Operations, As Adjusted. Due to Katy's recent restructuring initiatives we use income (loss) from continuing operations, as adjusted, as a measure of underlying operating performance of Katy's business and to make meaningful comparisons of different operating periods. This press release may contain various forward-looking statements. The forward-looking statements are based on the beliefs of the company's management, as well as assumptions made by, and information currently available to, the company's management. Additionally, the forward-looking statements are based on Katy's current expectations and projections about future events and trends affecting the financial condition of its business. The forward-looking statements are subject to risks and uncertainties, detailed from time to time in Katy's filings with the SEC, that may lead to results that differ materially from those expressed in any forward-looking statement made by the company or on its behalf. Katy undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Katy Industries, Inc. is a diversified corporation with interests primarily in Maintenance Products and Electrical Products. Company contact: Katy Industries, Inc. Amir Rosenthal (203) 598-0397 KATY INDUSTRIES, INC. SUMMARY OF OPERATIONS - UNAUDITED (In thousands, except per share data)
Three Months Ended ----------------------------- $ % December 31, December 31, Change Change 2003 2002 Inc/(Dec) Inc/(Dec) ------------ ------------ --------- --------- Net sales $ 118,596 $ 110,634 $ 7,962 7.2% Cost of goods sold 96,210 91,228 4,982 5.5% --------- --------- -------- ------- Gross profit 22,386 19,406 2,980 15.4% Selling, general and administrative expenses 14,145 17,017 (2,872) (16.9%) Impairments of long-lived assets 4,825 7,824 (2,999) (38.3%) Severance, restructuring and related charges 2,320 3,588 (1,268) (35.3%) --------- --------- -------- ------- Operating income (loss) 1,096 (9,023) 10,119 112.1% Equity in loss of equity method investment -- (311) 311 100.0% Interest, net (1,436) (1,384) (52) (3.8%) Other, net (1,642) (82) (1,560) (1902.4%) --------- --------- -------- ------- Loss before benefit (provision) for income taxes (1,982) (10,800) 8,818 81.6% Benefit (provision) for income taxes 82 (6,380) 6,462 101.3% --------- --------- -------- ------- Loss from continuing operations before distributions of preferred interest in subsidiary (1,900) (17,180) 15,280 88.9% Distributions on preferred interest of subsidiary, net of tax -- (609) 609 100.0% --------- --------- -------- ------- Loss from continuing operations (1,900) (17,789) 15,889 89.3% Loss from operations of discontinued businesses, net of tax -- (9,033) 9,033 100.0% Gain on sale of discontinued businesses, net of tax -- 3,306 (3,306) (100.0%) --------- --------- -------- ------- Loss before cumulative effect of a change in accounting principle (1,900) (23,516) 21,616 91.9% Cumulative effect of a change in accounting principle, net of tax -- 1,676 (1,676) (100.0%) --------- --------- -------- ------- Net loss (1,900) (21,840) 19,940 91.3% Payment in kind dividends on convertible preferred stock (3,462) (3,284) (178) (5.4%) --------- --------- -------- ------- Net loss attributable to common stockholders $ (5,362) $ (25,124) $ 19,762 78.7% ========= ========= ======== ======= Income (loss) per share of common stock - basic and diluted: Loss from continuing operations $ (0.24) $ (2.13) $ 1.89 88.7% Payment in kind (PIK) dividends on convertible preferred stock (0.44) (0.39) (0.05) (12.8%) --------- --------- -------- ------- Loss from continuing operations attributable to common stockholders (0.68) (2.52) 1.84 73.0% Discontinued operations -- (0.68) 0.68 100.0% Cumulative effect of a change in accounting principle -- 0.20 (0.20) N/M --------- --------- -------- ------- Net loss attributable to common stockholders $ (0.68) $ (3.00) $ 2.32 77.3% ========= ========= ======== ======= Weighted average shares outstanding - basic and diluted 7,940 8,362 ========= ========= Other Information Working capital, excluding current maturities, long-term debt $ 43,439 $ 35,206 $ 8,233 23.4% ========= ========= ======== ======= Bank debt, including portions classified as current $ 39,663 $ 45,451 $ (5,788) (12.7%) ========= ========= ======== ======= Preferred interest in subsidiary $ -- $ 16,400 $(16,400) N/M ========= ========= ======== ======= Stockholders' equity $ 102,292 $ 102,172 $ 120 0.1% ========= ========= ======== ======= Capital expenditures $ 6,298 $ 1,886 $ 4,412 233.9% ========= ========= ======== =======
KATY INDUSTRIES, INC. SUMMARY OF OPERATIONS - UNAUDITED (In thousands, except per share data)
Twelve Months Ended ----------------------------- $ % December 31, December 31, Change Change 2003 2002 Inc/(Dec) Inc/(Dec) ------------ ------------ --------- --------- Net sales $ 436,410 $ 445,755 $ (9,345) (2.1%) Cost of goods sold 365,563 373,578 (8,015) (2.1%) --------- --------- -------- ------- Gross profit 70,847 72,177 (1,330) (1.8%) Selling, general and administrative expenses 59,740 63,657 (3,917) (6.2%) Impairments of long-lived assets 11,880 21,204 (9,324) (44.0%) Severance, restructuring and related charges 8,132 19,155 (11,023) (57.5%) Loss on SESCO transaction -- 6,010 (6,010) (100.0%) --------- --------- -------- ------- Operating loss (8,905) (37,849) 28,944 76.5% Equity in (loss) income of equity method investment (including impairment charge of $5.5 million in 2003) (5,689) 295 (5,984) (2028.5%) Interest, net (6,137) (6,046) (91) (1.5%) Other, net (1,234) (408) (826) (202.5%) --------- --------- -------- ------- Loss before benefit (provision) for income taxes (21,965) (44,008) 22,043 50.1% Benefit (provision) for income taxes 3,158 (7,482) 10,640 142.2% --------- --------- -------- ------- Loss from continuing operations before distributions on preferred interest in subsidiary (18,807) (51,490) 32,683 63.5% Distributions on preferred interest of subsidiary, net of tax (80) (1,593) 1,513 95.0% --------- --------- -------- ------- Loss from continuing operations (18,887) (53,083) 34,196 64.4% Income (loss) from operations of discontinued businesses, net of tax 2,081 (4,458) 6,539 146.7% Gain on sale of discontinued businesses, net of tax 7,442 3,306 4,136 125.1% --------- --------- -------- ------- Loss before cumulative effect of a change in accounting principle (9,364) (54,235) 44,871 82.7% Cumulative effect of a change in accounting principle, net of tax -- (2,514) 2,514 100.0% --------- --------- -------- ------- Net loss (9,364) (56,749) 47,385 83.5% Gain on early redemption of preferred interest of subsidiary 6,560 -- 6,560 N/M Payment in kind dividends on convertible preferred stock (12,811) (11,136) (1,675) (15.0%) --------- --------- -------- ------- Net loss attributable to common stockholders $ (15,615) $ (67,885) $ 52,270 77.0% ========= ========= ======== ======= Income (loss) per share of common stock - basic and diluted: Loss from continuing operations $ (2.30) $ (6.34) $ 4.04 63.7% Gain on early redemption of preferred interest of subsidiary 0.80 -- 0.80 N/M Payment in kind (PIK) dividends on convertible preferred stock (1.56) (1.33) (0.23) (17.3%) --------- --------- -------- ------- Loss from continuing operations attributable to common stockholders (3.06) (7.67) 4.61 60.1% Discontinued operations 1.16 (0.14) 1.30 928.6% Cumulative effect of a change in accounting principle -- (0.30) 0.30 100.0% --------- --------- -------- ------- Net loss attributable to common stockholders $ (1.90) $ (8.11) $ 6.21 76.6% ========= ========= ======== ======= Weighted average shares outstanding - basic and diluted 8,215 8,371 ========= ========= Other Information Working capital, excluding current maturities, long-term debt $ 43,439 $ 35,206 $ 8,233 23.4% ========= ========= ======== ======= Bank debt, including portions classified as current $ 39,663 $ 45,451 $ (5,788) (12.7%) ========= ========= ======== ======= Preferred interest in subsidiary $ -- $ 16,400 $(16,400) N/M ========= ========= ======== ======= Stockholders' equity $ 102,292 $ 102,172 $ 120 0.1% ========= ========= ======== ======= Capital expenditures $ 13,435 $ 10,119 $ 3,316 32.8% ========= ========= ======== =======
KATY INDUSTRIES, INC. RECONCILIATIONS OF GAAP RESULTS UNAUDITED TO RESULTS EXCLUDING CERTAIN UNUSUAL ITEMS (In thousands, except per share data)
Three Months Ended -------------------------------- December 31, December 31, 2003 2002 ------------ ------------ Reconciliation of loss from continuing operations to income (loss) from continuing operations, as adjusted Loss from continuing operations $ (1,900) $(17,789) Unusual items: Impairments of long-lived assets 4,825 7,824 Severance, restructuring and related charges 2,320 3,588 Net write off of receivables from businesses disposed of prior to 2002 and gain on sale of real estate (included in other, net) 977 -- Adjustment to reflect a more normalized effective tax rate excluding unusual items (2,415) 6,147 -------- -------- Income (loss) from continuing operations, as adjusted $ 3,807 $ (230) ======== ======== Income (loss) from continuing operations, as adjusted per share Loss from continuing operations per share $ (0.24) $ (2.13) Unusual items per share 1.02 1.36 Adjustment to reflect a more normalized effective tax rate excluding unusual items per share (0.30) 0.74 -------- -------- Income (loss) from continuing operations, as adjusted per share $ 0.48 $ (0.03) ======== ======== Weighted average shares outstanding - basic and diluted 7,940 8,362 ======== ======== EBITDA, as adjusted: Net loss $ (1,900) $(21,840) Interest, net 1,436 1,384 (Benefit) provision for income taxes (82) 6,380 Depreciation and amortization 5,423 3,863 -------- -------- EBITDA 4,877 (10,213) Add back: Distributions on preferred interest of subsidiary, net of tax -- 609 Loss from operations of discontinued businesses, net of tax -- 9,033 Gain on sale of discontinued businesses, net of tax -- (3,306) Cumulative effect of a change in accounting principle, net of tax -- (1,676) Impairments of long-lived assets 4,825 7,824 Severance, restructuring and related charges 2,320 3,588 Net write off of receivables from businesses disposed of prior to 2002 and gain on sale of real estate (included in other, net) 977 -- -------- -------- EBITDA, as adjusted $ 12,999 $ 5,859 ======== ======== EBITDA, as adjusted, as a % of sales 11.0% 5.3% ======== ========
KATY INDUSTRIES, INC. RECONCILIATIONS OF GAAP RESULTS UNAUDITED TO RESULTS EXCLUDING CERTAIN UNUSUAL ITEMS (In thousands, except per share data)
Twelve Months Ended -------------------------------- December 31, December 31, 2003 2002 ------------ ------------ Reconciliation of loss from continuing operations to income (loss) from continuing operations, as adjusted Loss from continuing operations $(18,887) $(53,083) Unusual items: Impairments of long-lived assets 11,880 21,204 Severance, restructuring and related charges 8,132 19,155 Loss on SESCO transaction -- 6,010 Impairment of equity method investment 5,521 -- Net write off of receivables from businesses disposed of prior to 2002 and net gain on sale of real estate (included in other, net) 208 -- Adjustment to reflect a more normalized effective tax rate excluding unusual items (4,593) 6,585 -------- -------- Income (loss) from continuing operations, as adjusted $ 2,261 $ (129) ======== ======== Income (loss) from continuing operations, as adjusted per share Loss from continuing operations per share $ (2.30) $ (6.34) Unusual items per share 3.13 5.54 Adjustment to reflect a more normalized effective tax rate excluding unusual items per share (0.55) 0.78 -------- -------- Income (loss) from continuing operations, as adjusted per share $ 0.28 $ (0.02) ======== ======== Weighted average shares outstanding - basic and diluted 8,215 8,371 ======== ======== EBITDA, as adjusted: Net loss $ (9,364) $(56,749) Interest, net 6,137 6,046 (Benefit) provision for income taxes (3,158) 7,482 Depreciation and amortization 21,954 19,259 -------- -------- EBITDA 15,569 (23,962) Add back: Distributions on preferred interest of subsidiary, net of tax 80 1,593 Loss from operations of discontinued businesses, net of tax (2,081) 4,458 Gain on sale of discontinued businesses, net of tax (7,442) (3,306) Cumulative effect of a change in accounting principle, net of tax -- 2,514 Impairments of long-lived assets 11,880 21,204 Severance, restructuring and related charges 8,132 19,155 Loss on SESCO transaction -- 6,010 Impairment of equity method investment 5,521 -- Net write off of receivables from businesses disposed of prior to 2002 and net gain on sale of real estate (included in other, net) 208 -- -------- -------- EBITDA, as adjusted 31,867 27,666 ======== ======== EBITDA, as adjusted, as a % of sales 7.3% 6.2% ======== ========
KATY INDUSTRIES, INC. BALANCE SHEETS - UNAUDITED (In thousands)
$ % December 31, December 31, Change Change 2003 2002 (a) Inc/(Dec) Inc/(Dec) ------------ ------------ --------- --------- Assets Current assets: Cash $ 6,748 $ 4,842 $ 1,906 39.4% Accounts receivable, net 65,197 58,463 6,734 11.5% Inventory, net 53,545 56,806 (3,261) (5.7%) Other current assets 1,658 1,775 (117) (6.6%) Current assets of discontinued operations (b) -- 7,748 (7,748) (100.0%) --------- --------- -------- ------ Total current assets 127,148 129,634 (2,486) (1.9%) --------- --------- -------- ------ Other assets: Goodwill 10,215 10,543 (328) (3.1%) Intangibles, net 22,399 25,536 (3,137) (12.3%) Other 10,352 19,601 (9,249) (47.2%) Non-current assets of discontinued operations (b) -- 4,069 (4,069) (100.0%) --------- --------- -------- ------ Total other assets 42,966 59,749 (16,783) (28.1%) --------- --------- -------- ------ Property, plant and equipment 149,634 158,900 (9,266) (5.8%) Less: accumulated depreciation (78,040) (72,306) (5,734) (7.9%) --------- --------- -------- ------ Property, plant and equipment, net 71,594 86,594 (15,000) (17.3%) --------- --------- -------- ------ --------- --------- -------- ------ Total assets $ 241,708 $ 275,977 $(34,269) (12.4%) ========= ========= ======== ====== Liabilities and stockholders' equity Current liabilities: Accounts payable $ 37,259 $ 36,765 $ 494 1.3% Accrued expenses 46,450 54,700 (8,250) (15.1%) Current maturities, long-term debt 2,857 700 2,157 308.1% Revolving credit agreement 36,000 44,751 (8,751) (19.6%) Current liabilities of discontinued operations (b) -- 2,963 (2,963) (100.0%) --------- --------- -------- ------ Total current liabilities 122,566 139,879 (17,313) (12.4%) Long-term debt, less current maturities 806 -- 806 N/M Other liabilities 16,044 17,526 (1,482) (8.5%) --------- --------- -------- ------ Total liabilities 139,416 157,405 (17,989) (11.4%) --------- --------- -------- ------ Preferred interest of subsidiary -- 16,400 (16,400) (100.0%) Stockholders' equity Convertible preferred stock 93,507 80,696 12,811 15.9% Common stock 9,822 9,822 -- 0.0% Additional paid-in capital 40,441 46,701 (6,260) (13.4%) Accumulated other comprehensive income (loss) 2,387 (3,046) 5,433 178.4% Accumulated deficit (21,137) (11,773) (9,364) (79.5%) Treasury stock (22,728) (20,228) (2,500) (12.4%) -------------------------- -------- ------ Total stockholders' equity 102,292 102,172 120 0.1% -------------------------- -------- ------ --------- --------- -------- ------ Total liabilities and stockholders' equity $ 241,708 $ 275,977 $(34,269) (12.4%) ========= ========= ======== ======
(a) Certain amounts have been reclassified to conform with current year presentation. (b) Amounts include assets and liabilities of Hamilton Precision Metals, L.P., GC/Waldom Electronics, Inc. and Duckback Products, Inc. KATY INDUSTRIES, INC. STATEMENTS OF CASH FLOWS - UNAUDITED (In thousands)
For the twelve months ended ---------------------------- $ % December 31, December 31, Change Change 2003 2002 Inc/(Dec) Inc/(Dec) ------------ ------------ --------- --------- Cash flows from operating activities: Net loss $ (9,364) $(56,749) (Income) loss from operations of discontinued businesses (9,523) 1,152 -------- -------- Loss from continuing operations (18,887) (55,597) Cumulative effect of a change in accounting principle -- 2,514 Depreciation and amortization 21,954 19,259 Impairments of long-lived assets 11,880 21,204 Write-off and amortization of debt issuance costs 2,981 1,605 (Gain) loss on sale of assets (627) 160 Loss on SESCO transaction -- 6,010 Equity in loss (income) of equity method investment (including impairment charge of $5.5 million in 2003) 5,689 (295) Deferred income taxes -- 8,889 -------- -------- 22,990 3,749 Changes in operating assets and liabilities: Accounts receivable (3,869) 9,591 Inventory 5,504 (4,150) Other assets 1,100 776 Accounts payable (727) 3,369 Accrued expenses (9,679) 6,640 Other, net (2,125) 4,997 -------- -------- (9,796) 21,223 Net cash provided by continuing operations 13,194 24,972 Net cash (used in) provided by discontinued operations (5,159) 6,931 -------- -------- ------- ------- Net cash provided by operating activities 8,035 31,903 (23,868) (75%) -------- -------- ------- ------- Cash flows from investing activities: Capital expenditures of continuing operations (13,324) (9,987) Capital expenditures of discontinued operations (111) (132) Acquisition of subsidiary, net of cash acquired (1,161) -- Collections of notes receivable from sales of subsidiaries 1,035 820 Proceeds from sale of subsidiaries, net 23,647 13,947 Proceeds from sale of assets 2,839 249 -------- -------- ------- ------- Net cash provided by investing activities 12,925 4,897 8,028 164% -------- -------- ------- ------- Cash flows from financing activities: Net repayments of revolving loans (8,751) (12,249) Net borrowings (repayments) of term loans 3,663 (26,393) Direct costs associated with debt facilities (1,583) (720) Redemption of preferred interest of subsidiary (9,840) -- Repayment of real estate and chattel mortgages (700) -- Repurchases of common stock (2,520) -- -------- -------- ------- ------- Net cash used in financing activities (19,731) (39,362) 19,631 50% -------- -------- ------- ------- Effect of exchange rate changes on cash and cash equivalents 677 (432) -------- -------- Net increase (decrease) in cash and cash equivalents 1,906 (2,994) Cash and cash equivalents, beginning of period 4,842 7,836 -------- -------- ------- ------- Cash and cash equivalents, end of period $ 6,748 $ 4,842 $ 1,906 39% ======== ======== ======= ======= Free Cash Flow Net cash provided by operating activities $ 8,035 $ 31,903 Capital expenditures of continuing operations (13,324) (9,987) Capital expenditures of discontinued operations (111) (132) -------- -------- $ (5,400) $ 21,784 ======== ========