-----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, MCuz2BIixytEB9DIxVLd6vC6STjUJoKAHfljeMxgNDc9YTle9qOPXiqT83U0i7jB z3gKb3ApVIZXJNAN6IyM2Q== 0000066895-95-000019.txt : 19951018 0000066895-95-000019.hdr.sgml : 19951018 ACCESSION NUMBER: 0000066895-95-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951017 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MISSISSIPPI CHEMICAL CORP /MS/ CENTRAL INDEX KEY: 0000066895 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 640292638 STATE OF INCORPORATION: MS FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20411 FILM NUMBER: 95581299 BUSINESS ADDRESS: STREET 1: HIGHWAY 49 EAST CITY: YAZOO CITY STATE: MS ZIP: 39194 BUSINESS PHONE: 6017464131 MAIL ADDRESS: STREET 1: P O BOX 388 CITY: YAZOO CITY STATE: MS ZIP: 39194 FORMER COMPANY: FORMER CONFORMED NAME: MISSISSIPPI CHEMICAL CORP DATE OF NAME CHANGE: 19920703 EX-27 1
5 This schedule contains first quarter summary financial information extracted from Mississippi Chemical Corporation fiscal 1996 first quarter Form 10-Q and is qualified in its entirety by reference to such Form 10-Q filing. 0000066895 MISSISSIPPI CHEMICAL CORPORATION 1,000 3-MOS JUN-30-1996 SEP-30-1995 32,031 0 37,382 1,200 47,599 122,464 391,437 268,774 311,780 54,013 0 229 0 0 225,987 311,780 96,570 96,584 66,802 79,685 0 200,000 (55) 16,954 7,250 9,704 0 0 0 9,704 0.43 0
10-Q 2 FORM 10-Q 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 Quarter Ended September 30, 1995 OR [ ] Transition Report Pursuant to Section 13 or 15(d) Of the Securities Exchange Act of 1934 For Quarter Ended September 30, 1995 Commission File Number 2-7803 MISSISSIPPI CHEMICAL CORPORATION Organized in the State of Mississippi Identification No. 64-0292638 P. O. Box 388, Yazoo City, Mississippi 39194 Telephone No. 601+746-4131 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 the latest practicable date. Class Number of Shares Common Stock, $0.01 par value 22,148,450 MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES INDEX Page Number PART I. FINANCIAL INFORMATION: Item 1. Consolidated Financial Statements Consolidated Statements of Income 3 Three months ended September 30, 1995 and 1994 Consolidated Balance Sheets 4 September 30, 1995 and June 30, 1995 Consolidated Statements of Shareholders' Equity 5 Fiscal Year Ended June 30, 1995 and Three months ended September 30, 1995 Consolidated Statements of Cash Flows 6 Three months ended September 30, 1995 and 1994 Notes to Consolidated Financial Statements 7 - 8 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 9 - 12 PART II. OTHER INFORMATION: Item 6(a). Exhibits 13 Item 6(b). Reports on Form 8-K 13 Signatures 13 MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Three months ended September 30, --------------------- 1995 1994 -------- -------- (Dollars in thousands) Net sales $ 96,570 $ 72,751 Operating expenses: Cost of products sold 66,802 51,415 Selling 6,863 5,630 General and administrative 6,020 4,830 -------- -------- 79,685 61,875 -------- -------- Operating income 16,885 10,876 Other (expense) income: Interest, net 55 (800) Other 14 (437) -------- -------- Income before income taxes 16,954 9,639 Income tax expense 7,250 3,863 -------- --------- Net income $ 9,704 $ 5,776 ======== ========= Earnings per share (see Note 2) $ 0.43 $ 0.27 ======== ========= The accompanying notes are an integral part of these financial statements.
MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS September 30, June 30, 1995 1995 ------------ --------- (Dollars in thousands) Current assets: Cash and cash equivalents $ 32,031 $ 29,617 Accounts receivable 36,182 30,424 Inventories: Finished products 16,074 19,817 Raw materials and supplies 8,169 6,740 Replacement parts 23,356 23,758 -------- --------- Total inventories 47,599 50,315 Prepaid expenses and other current assets 4,464 3,012 Deferred income taxes 2,188 1,929 -------- -------- Total current assets 122,464 115,297 Investments and other assets: Investments 4,319 4,087 Other 9,415 10,275 -------- -------- Total investments and other assets 13,734 14,362 Properties held for sale 52,919 52,919 Property, plant and equipment, at cost 391,437 384,331 Less accumulated depreciation, depletion and amortization (268,774) (264,694) -------- -------- Net property, plant and equipment 122,663 119,637 -------- -------- $311,780 $302,215 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Long-term debt due within one year $ 175 $ 775 Accounts payable 40,539 31,520 Accrued liabilities 7,123 8,799 Income tax payable 6,176 3,413 -------- -------- Total current liabilities 54,013 44,507 Long-term debt 34 2,478 Other long-term liabilities and deferred credits 17,640 15,167 Deferred income taxes 13,877 12,756 Shareholders' equity 226,216 227,307 -------- -------- $311,780 $302,215 ======== ======== The accompanying notes are an integral part of these financial statements.
MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY SEPTEMBER 30, 1995 (Dollars in thousands) Cooperative Additional Capital Retained Common Common Paid-In Equity Earnings Treasury Stock Stock Capital Credits (Deficit) Stock Total ----------- ------ ---------- ------- -------- -------- ----- Balances, July 1, 1994 $28,392 $ - $66,848 $62,352 $(14,636) $ - $142,956 Conversion of cooperative stock (26,375) 155 26,220 - - - - Conversion of capital equity credits and allocated surplus accounts - 41 42,723 (62,352) 19,588 - - Redemptions (2,017) (1) (4,095) - - - (6,113) ------- ----- ------- ------- ------- ------- -------- Subtotal - 195 131,696 - 4,952 - 136,843 Stock issued - 34 46,636 - - - 46,670 Cash dividends paid - - - - (3,662) - (3,662) Net income - - - - 52,230 - 52,230 Treasury stock purchased - - - - - (4,774) (4,774) ------- ------ -------- ------- ------- ------- -------- Balances, June 30, 1995 - 229 178,332 - 53,520 (4,774) 227,307 Net income - - - - 9,704 - 9,704 Cash dividends paid - - - - (1,776) - (1,776) Shares reissued - - 32 - - 82 114 Treasury stock purchased - - - - - (9,133) (9,133) ------- ------ -------- ------- ------- -------- -------- Balances, September 30, 1995 $ - $ 229 $178,364 $ - $61,448 $(13,825) $226,216 ======= ====== ======== ======= ======= ======== ======== The accompanying notes are an integral part of these financial statements.
MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Three months ended September 30, -------------------- 1995 1994 -------- --------- (Dollars in thousands) Cash flows from operating activities: Net income $ 9,704 $ 5,776 Reconciliation of net income to net cash provided by operating activities: Net change in operating assets and liabilities 5,776 (7,978) Depreciation, depletion and amortization 4,145 3,921 Deferred income taxes 862 3,608 Other 627 (213) -------- -------- Net cash provided by operating activities 21,114 5,114 Cash flows from investing activities: Purchase of property, plant and equipment (6,355) (2,819) Proceeds received from option 2,000 3,000 Payments for newsprint contract obligations - (8,751) Other (394) 265 -------- -------- Net cash used by investing activities (4,749) (8,305) Cash flows from financing activities: Debt payments (3,042) (91,643) Debt proceeds - 54,625 Purchase of treasury stock (9,133) - Cash dividends paid (1,776) - Issuance of common stock - 47,401 Conversion of common stock - (4,487) -------- -------- Net cash (used) provided by financing activities (13,951) 5,896 -------- -------- Net increase in cash and cash equivalents 2,414 2,705 Cash and cash equivalents - beginning of period 29,617 23,219 -------- -------- Cash and cash equivalents - end of period $ 32,031 $ 25,924 ======== ======== The accompanying notes are an integral part of these financial statements.
MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - INTERIM FINANCIAL STATEMENTS The accompanying consolidated financial statements of Mississippi Chemical Corporation and its subsidiaries ("the Company") have been prepared by the Company, without audit. In the opinion of the Company's management, the financial statements reflect all adjustments necessary to present fairly the results of operations for the three-month periods ended September 30, 1995 and 1994, the Company's financial position at September 30, 1995 and June 30, 1995, the cash flows for the three-month periods ended September 30, 1995 and 1994, and the consolidated statements of shareholders' equity as of September 30, 1995. These adjustments are of a normal recurring nature, which are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the interim periods. Certain notes and other information have been condensed or omitted from the interim financial statements presented in the Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's June 30, 1995, audited financial statements. Due to the seasonal nature of the Company's business, the results for the first quarter of 1995 are not necessarily indicative of the operating results for the full fiscal year. NOTE 2 - EARNINGS PER SHARE The number of shares used in the earnings per share computation are the weighted average number of common shares outstanding plus dilutive common share equivalents as follows: September 30, September 30, 1995 1994 ------------ ------------- Common shares outstanding, net of treasury shares 22,285,802 21,106,717 Common stock equivalents for employee stock options 63,182 18,469 ---------- ---------- 22,348,984 21,125,186 ========== ========== In July 1995, the Company's board of directors declared a regular quarterly cash dividend of $.08 per common share outstanding. This dividend was paid on August 18, 1995, to shareholders of record as of August 1, 1995. NOTE 3 - COMMITMENTS AND CONTINGENCIES During 1990, the Company entered into an agreement granting a third party the exclusive option, for a period of four years, to purchase the Company's undeveloped phosphate rock property of approximately 12,000 acres in Hardee County, Florida. As of July 12, 1994, the Company and the option holder entered into new agreements with respect to this property whereby the Company conveyed a portion of the property to the third party and granted to the third party the exclusive option to purchase the remaining portion of the property. In addition, the Company was granted a put option whereby the Company has the right and option to sell the remaining portion of the property to the third party if the third party does not exercise its option to purchase the remaining property and was granted an exclusive option to repurchase the previously conveyed portion in the event the third party does not exercise its option and the Company does not exercise its put option. The third party's option will expire on January 16, 1998. The Company's put option will expire six months after the third party's option expires, and its repurchase option will expire one year after the Company's put option expires. These properties are classified as property held for sale at September 30, 1995 and June 30, 1995. In December 1994, the Company signed a letter of intent with Farmland Industries, Inc. to enter into a 50-50 joint venture to construct and operate a 2,000 short-ton-per-day anhydrous ammonia plant to be located in Trinidad. The project is expected to cost approximately $330 million. Startup of the facility is scheduled for 1998. The Company intends to use the majority of its portion of the production from the new facility, expected to be in excess of 350,000 tons per year, primarily as a raw material for upgrading into finished fertilizer products at its existing facilities. At September 30, 1995, the Company had outstanding commitments to various customers for the sale of approximately 340,000 tons of nitrogen solutions. These customers have prepaid for this tonnage, and at September 30, the Company had recorded on its balance sheet a liability related to these commitments. NOTE 4 - CHANGE IN ACCOUNTING PRINCIPLE Effective July 1, 1995, the Company changed its method of depreciating newly acquired long-lived assets from the declining balance method to the straight line method. This change in accounting principle did not have a material effect on the Company's financial statements for the quarter ended September 30, 1995. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following discussion and analysis should be read in conjunction with the attached consolidated financial statements and notes thereto, and with the Company's audited financial statements and notes thereto for the fiscal year ended June 30, 1995. The usage of fertilizer in the Company's trade territory is highly seasonal, and the Company's quarterly results reflect the fact that in the Company's markets significantly more fertilizer is purchased in the spring. Significant portions of the Company's net sales and operating income are generated in the last four months of the Company's fiscal year (March through June). Since interim period operating results reflect the seasonal nature of the Company's business, they are not indicative of results expected for the full fiscal year. In addition, quarterly results can vary significantly from year to year primarily as a result of weather-related shifts in planting schedules and purchase patterns. The Company incurs substantial expenditures for fixed costs throughout the year and substantial expenditures for inventory in advance of the spring planting season. The Company's results of operations for the quarter ended September 30, 1995, were favorably impacted by increased sales volumes for nitrogen fertilizers due to strong fall demand and a carryover effect caused by slow product movement resulting from adverse weather conditions in May and June of 1995. Also during the quarter, the current favorable worldwide supply/demand balance for nitrogen and DAP fertilizers caused sales prices to increase. This favorable balance is expected to continue through the current fiscal year. In May 1995, the Board of Directors authorized the repurchase of up to 1,500,000 shares of the Company's common stock in the open market or in privately negotiated transactions. As of September 30, 1995, the Company had repurchased 755,000 shares pursuant to that authorization. RESULTS OF OPERATIONS Following are summaries of the Company's sales results by product categories: Quarter Ended September 30, ---------------------- 1995 1994 ------- ------- (in thousands) Net Sales: Nitrogen $55,763 $39,322 DAP 32,456 27,352 Potash 6,980 5,692 Other 1,371 385 ------- ------- Net Sales $96,570 $72,751 ======= ======= Quarter Ended September 30, -------------------- 1995 1994 ------- ------ (in thousands) Tons Sold: Nitrogen 419 340 DAP 190 182 Potash 102 78 Quarter Ended September 30, -------------------- 1995 1994 ------- ------ Average Price Per Ton: Nitrogen $ 133 $ 116 DAP $ 171 $ 150 Potash $ 68 $ 73 NET SALES. Net sales increased 32.7% from $72.8 million for the quarter ended September 30, 1994, to $96.6 million for the quarter ended September 30, 1995, primarily as a result of increased sales volumes for nitrogen fertilizers and potash and higher sales prices for nitrogen fertilizers and DAP. Nitrogen fertilizer sales increased 41.8% as a result of a 23.2% increase in tons sold and a 15.1% increase in the average price per ton. Sales of DAP increased 18.7% as a result of a 4.0% increase in tons sold and a 14.1% increase in the average price per ton. Potash sales increased 22.6% as a result of a 31.5% increase in tons sold offset by a 6.8% decrease in the average price per ton. COST OF PRODUCTS SOLD. Cost of products sold increased from $51.4 million for the quarter ended September 30, 1994, to $66.8 million for the quarter ended September 30, 1995. As a percentage of net sales, cost of products sold decreased from 70.7% to 69.2%. This decrease, as a percentage of net sales, reflects increased sales prices for nitrogen and DAP products partially offset by an increase in the cost per ton of DAP and nitrogen fertilizers. Nitrogen fertilizer cost per ton increased due to increased purchases of ammonia and urea, higher maintenance and labor costs, partially offset by lower prices paid for natural gas during the current year quarter. Maintenance and labor costs were higher in the current quarter due to the Company's biennial maintenance turnaround at its Yazoo City facility which began in late September. DAP costs per ton increased as a result of higher raw material costs, primarily phosphate rock. Phosphate rock costs increased due to the Company's phosphate rock supply contract which bases the price of phosphate rock on the phosphate rock costs incurred by certain domestic phosphate producers and the financial performance of the Company's phosphate operations. Potash costs per ton did not change significantly for the quarter ended September 30, 1995. SELLING EXPENSES. Selling expenses increased from $5.6 million for the quarter ended September 30, 1994, to $6.9 million for the quarter ended September 30, 1995, reflecting higher sales volumes. As a percentage of net sales, selling expenses decreased from 7.7% to 7.1%. Factors causing this decrease were increased sales prices for nitrogen and DAP products partially offset by higher delivery and storage costs during the current quarter due to the Company shipping more of its nitrogen products from its outlying storage facilities. GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses increased from $4.8 million for the quarter ended September 30, 1994, to $6.0 million for the quarter ended September 30, 1995. This increase was primarily the result of increased employee incentives related to income levels, an increase in reserves for uncollectible accounts and a decrease in service fees received from a former subsidiary which reduced the Company's general and administrative expenses in the prior year. As a percentage of net sales, general and administrative expenses decreased from 6.6% for the quarter ended September 30, 1994 to 6.2% for the quarter ended September 30, 1995. OPERATING INCOME. As a result of the above factors, operating income increased from $10.9 million for the quarter ended September 30, 1994, to $16.9 million for the quarter ended September 30, 1995, a 55.3% increase. INTEREST, NET. Net interest income for the quarter ended September 30, 1995, was $55,000 compared to interest expense of $800,000 for the quarter ended September 30, 1994. This change is primarily the reflection of lower interest expense incurred during the current quarter resulting from lower levels of borrowings. The Company repaid most of its debt during the prior fiscal year from the proceeds of an initial stock offering in August 1994. The Company also experienced higher interest income during the current quarter due to increased levels of investments and higher rates earned on these investments. INCOME TAX EXPENSE. Income tax expense increased from $3.9 million for the quarter ended September 30, 1994, to $7.3 million for the quarter ended September 30, 1995, reflecting higher earnings during the current year quarter. NET INCOME. As a result of the foregoing, net income increased from $5.8 million for the quarter ended September 30, 1994, to $9.7 million for the quarter ended September 30, 1995. LIQUIDITY AND CAPITAL RESOURCES At September 30, 1995, the Company had cash and cash equivalents of $32.0 million, compared to $29.6 million at June 30, 1995, an increase of $2.4 million. OPERATING ACTIVITIES. For the quarters ended September 30, 1995 and 1994, net cash provided by operating activities was $21.1 million and $5.1 million, respectively. INVESTING ACTIVITIES. Net cash used by investing activities was $4.7 million for the quarter ended September 30, 1995, and $8.3 million for the quarter ended September 30, 1994, primarily reflecting capital expenditures in those periods partially offset by the receipt of option payments relating to the Company's Florida phosphate rock properties. The prior year quarter also includes an $8.8 million payment made to a former subsidiary to terminate a newsprint purchase contract. Capital expenditures were $6.4 million during the quarter ended September 30, 1995. These expenditures were for improvements and modifications to the Company's facilities. FINANCING ACTIVITIES. Net cash used by financing activities was $14.0 million for the quarter ended September 30, 1995, and net cash provided by financing activities was $5.9 million for the quarter ended September 30, 1994. During the current quarter, the amounts used by financing activities included $9.1 million for the purchase of treasury stock and $1.8 million in cash dividends. The Company also paid $3.0 million in debt payments which included $2.4 million in prepayments. During the prior year quarter, the amounts provided by financing activities included $47.4 million proceeds received from a stock offering in August 1994. These proceeds were subsequently used to prepay a portion of the Company's long- term debt. Also during the prior year quarter, the Company paid $4.5 million to its shareholders related to the reorganization of the Company. The Company and its subsidiaries have commitments from various banks for short-term borrowings up to $20.0 million, which includes $15.0 million from NationsBank Corporation. At September 30, 1995, there were no short-term borrowings outstanding on these commitments. At September 30, 1994, the Company had short-term borrowings outstanding of $7.8 million. In addition to its short-term lines, the Company also has a $50.0 million long-term revolving credit facility with NationsBank Corporation that bears interest at the prime rate or for fixed periods at interest rates related to the London Interbank Offered Rates or U.S. Treasury notes. At September 30, 1995, there was no balance outstanding on this facility. The amounts borrowed under the Company's credit lines vary based on the Company's seasonal requirements. The Company had no outstanding borrowings under either the short-term line or the revolving credit facility during the quarter ended September 30, 1995. The Company believes that existing cash, cash generated from operations and available lines of credit will be sufficient to satisfy its financing needs for the foreseeable future. PART II - OTHER INFORMATION Item 6(a). EXHIBITS. Exhibits filed as part of this report are listed below. SEC Exhibit Reference No. Description 18 Letter dated October 16, 1995 from Arthur Andersen LLP regarding change in accounting principles. 27 Financial Data Schedule. Item 6(b). REPORTS ON FORM 8-K. No reports on Form 8-K have been filed during the quarter for which this report is filed. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MISSISSIPPI CHEMICAL CORPORATION Date: October 17, 1995 /s/ William F. Hawkins -------------------------------- William F. Hawkins Senior Vice President - Finance and Administration Date: October 17, 1995 /s/ Rosalyn B. Glascoe -------------------------------- Rosalyn B. Glascoe Corporate Secretary EX-18 3 October 16, 1995 Mr. William F. Hawkins Senior Vice President - Finance and Administration Mississippi Chemical Corporation Post Office Box 388 Highway 49 East Yazoo City, Mississippi 39194 RE: Form 10-Q Report for the Quarter Ended September 30, 1995 Dear Mr. Hawkins: This letter is written to meet the requirements of Regulation S-K calling for a letter from a registrant's independent accountants whenever there has been a change in accounting principle or practice. We have been informed that as of July 1, 1995, Mississippi Chemical Corporation (the "Company"), changed from the declining balance method of accounting for depreciation to the straight-line method for assets placed into service after June 30, 1995. According to the management of the Company, this change was made to follow the depreciation method used by the industry in which the Company operates and to better match the depreciation expense of depreciable assets to that of the period of utility to the Company. A complete coordinated set of financial and reporting standards for determining the preferability of accounting principles among acceptable alternative principles has not been established by the accounting profession. Thus, we cannot make an objective determination of whether the change in accounting described in the preceding paragraph is to a preferable method. However, we have reviewed the pertinent factors, including those related to financial reporting, in this particular case on a subjective basis, and our opinion stated below is based on our determination made in this manner. We are of the opinion that the Company's change in method of accounting is to an acceptable alternative method of accounting which, based upon the reasons stated for the change and our discussions with you, is also preferable under the circumstances in this particular case. In arriving at this opinion, we have relied on the business judgment and business planning of your management. We have not audited the application of this change to the financial statements of any period subsequent to June 30, 1995. Further, we have not examined and do not express any opinion with respect to your financial statements for the three months ended September 30, 1995. Very truly yours, ARTHUR ANDERSEN LLP -----END PRIVACY-ENHANCED MESSAGE-----