-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, VjS+xqQEf9lCcrSm/b1ATK8nekrcmRSECy+2+lElxNE27uy3cgvWZDIKmosVGVCW IjUykZcBLJDpX2iQAzCM/w== 0000914760-94-000066.txt : 19941104 0000914760-94-000066.hdr.sgml : 19941104 ACCESSION NUMBER: 0000914760-94-000066 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941101 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MISSISSIPPI CHEMICAL CORP /MS/ CENTRAL INDEX KEY: 0000066895 STANDARD INDUSTRIAL CLASSIFICATION: 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: 94557059 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 10-Q 1 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, 1994 OR [ ] Transition Report Pursuant to Section 13 or 15(d) Of the Securities Exchange Act of 1934 For Quarter Ended September 30, 1994 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 22,855,164 MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES INDEX PART I. FINANCIAL INFORMATION: Item 1. Consolidated Financial Statements Consolidated Statements of Income Three months ended September 30, 1994 and 1993 Consolidated Balance Sheets September 30, 1994 and June 30, 1994 Consolidated Statements of Stockholders' Equity Fiscal Year Ended June 30, 1994 and Three months ended September 30, 1994 Consolidated Statements of Cash Flows Three months ended September 30, 1994 and 1993 Notes to Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition PART II. OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K - Exhibit #27 - Financial Data Schedule MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Three months ended September 30, --------------------- 1994 1993 --------- --------- (Dollars in thousands) Net sales $ 72,751 $ 45,220 Operating expenses: Cost of products sold 51,415 34,001 Selling 5,630 5,802 General and administrative 4,830 3,389 --------- -------- 61,875 43,192 --------- -------- Operating income 10,876 2,028 Other (expense) income: Interest, net (800) (1,126) Other (437) 80 --------- -------- Income from continuing operations before income taxes and cumulative effect of change in accounting principle 9,639 982 Income tax expense 3,863 183 --------- -------- Income from continuing operations before cumulative effect of change in accounting principle 5,776 799 Discontinued operations: Income from discontinued operations (less applicable income tax benefit of $1,923 in 1993) - 13,165 Cumulative effect to July 1, 1993, of change in accounting for income taxes - (6,149) -------- -------- Net income $ 5,776 $ 7,815 ======== ======== Earnings per share (see Note 2) $ 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, 1994 1994 ------------ -------- (Dollars in thousands) Current assets: Cash and cash equivalents $ 25,924 $ 23,219 Accounts receivable 29,164 28,659 Inventories: Finished products 12,946 7,518 Raw materials and supplies 4,178 2,851 Replacement parts 23,510 23,621 -------- -------- Total inventories 40,634 33,990 Prepaid expenses and other current assets 4,957 3,981 Deferred income tax benefit 8,004 9,682 -------- ------- Total current assets 108,683 99,531 Investments and other assets: National Bank for Cooperatives 6,882 7,441 Other 10,333 9,813 -------- ------- Total investments and other assets 17,215 17,254 Properties held for sale 52,919 66,928 Property, plant and equipment, at cost 369,724 366,992 Less accumulated depreciation, depletion and amortization (256,145) (252,275) --------- -------- Net property, plant and equipment 113,579 114,717 --------- -------- $ 292,396 $ 298,430 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Long-term debt due within one year $ 5,297 $ 2,948 Notes payable 7,800 7,030 Accounts payable 26,810 28,569 Accrued liabilities 7,022 11,297 Patronage refunds payable 14,756 14,756 --------- -------- Total current liabilities 61,685 64,600 Long-term debt 17,080 57,217 Other long-term liabilities and deferred credits 13,720 24,704 Deferred income tax payable 10,883 8,953 Stockholders' equity 189,028 142,956 --------- -------- $ 292,396 $ 298,430 ========= ========= The accompanying notes are an integral part of these financial statements. MISSISSIPPI CHEMICAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY SEPTEMBER 30, 1994
Additional Capital Retained Cooperative Common Paid-in Equity Earnings Common Stock Stock Capital Credits (Deficit) Total ------------ ------ ---------- ------- -------- ----- (Dollars in thousands) Balances, July 1, 1993 $ 27,933 $ - $ 65,692 $62,352 $(36,403) $119,574 Net income - - - - 36,523 36,523 Cash patronage refunds - - - - (14,756) (14,756) Stock issued 459 - 1,156 - - 1,615 -------- ------ -------- ------- -------- -------- Balances, June 30, 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 42,987 (62,352) 19,324 - Redemptions (2,017) (1) (4,376) - - (6,394) -------- ------- --------- -------- -------- ------- Subtotal - 195 131,679 - 4,688 136,562 Stock issued - 34 46,656 - - 46,690 Net income - - - - 5,776 5,776 -------- ------- ------- ------- -------- ------- Balances, September 30, 1994 $ - $ 229 $178,335 $ - $10,464 $189,028 ======== ======= ======== ======= ======== ======== 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, --------------------- 1994 1993 --------- --------- (Dollars in thousands) Cash flows from operating activities: Net income $ 5,776 $ 7,815 Income from discontinued operations - (13,165) -------- -------- Net income (loss) from continuing operations 5,776 (5,350) Reconciliation of net income (loss) from continuing operations to net cash provided (used) by operating activities: Net change in operating assets and liabilities (7,978) (9,675) Depreciation, depletion and amortization 3,921 3,943 Deferred income tax payable 3,608 6,204 Other (213) (275) -------- -------- Net cash provided (used) by operating activities 5,114 (5,153) Cash flows from investing activities: Purchase of property, plant and equipment (2,819) (3,229) Disposition of Newsprint South, Inc. (8,751) - Proceeds received from option 3,000 - Other 265 (877) -------- -------- Net cash used by investing activities (8,305) (4,106) Cash flows from financing activities: Debt payments (91,643) (15,465) Debt proceeds 54,625 19,805 Proceeds from issuance of common stock 47,401 - Redemption of common stock (4,487) - ------- -------- Net cash provided by financing activities 5,896 4,340 -------- -------- Net increase (decrease) in cash and cash equivalents 2,705 (4,919) Cash and cash equivalents - beginning of period 23,219 22,014 -------- -------- Cash and cash equivalents - end of period $ 25,924 $ 17,095 ======== ======== 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, 1994 and 1993, the Company's financial position at September 30, 1994 and June 30, 1994, the cash flows for the three-month periods ended September 30, 1994 and 1993, and the consolidated statements of stockholders' equity as of September 30, 1994. 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, 1994, audited financial statements. Due to the seasonal nature of the Company's business, the results for the first quarter of 1994 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, 1994 ------------ Common shares outstanding 21,106,717 Common stock equivalents for employee stock options 18,469 ---------- 21,125,186 ========== Earnings per share for the period ended September 30, 1993, are not meaningful and are not presented since the Company operated as a cooperative in the prior fiscal year. 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. 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. These properties are classified as property held for sale at September 30, 1994 and June 30, 1994. 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, 1994. The usage of fertilizer 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 one year to the next 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. Sales volumes during the quarter ended September 30, 1994, were particularly strong causing a reduction in inventories which may indicate a shift of a greater portion of annual sales volumes to the first quarter. The Company's results of operations for the three-month period ended September 30, 1994, were favorably impacted by increasing global demand for fertilizer products, excellent weather for fall fertilizer applications in the Company's primary trade territory and improved prices for the Company's products. During the quarter, anhydrous ammonia prices rose to a high of approximately $230.00 due to a tight supply/demand balance. The Company converts significantly all of the ammonia it produces into upgraded nitrogen products. Upgraded nitrogen product prices, particularly urea, ended the quarter on a positive note and are beginning to reflect the recent increases in ammonia prices. The current favorable supply/demand balance for nitrogen fertilizers is expected to continue through the current fiscal year. During the quarter, declining natural gas prices contributed to improved margins on nitrogen products. During the first quarter, DAP prices remained relatively stable; however, margins were pressured due to the rise in the price of ammonia, a raw material in the manufacture of DAP. Results of Operations --------------------- Following are summaries of the Company's sales results by product categories: Quarter Ended September 30 -------------------- 1994 1993 -------- -------- (in thousands) Net Sales: Nitrogen $ 39,322 $ 31,725 DAP 27,352 10,596 Potash 5,692 2,510 Other 385 389 --------- -------- Net Sales $ 72,751 $ 45,220 ======== ======== Quarter Ended September 30 -------------------- 1994 1993 -------- -------- (in thousands) Tons Sold: Nitrogen 340 273 DAP 182 101 Potash 78 35 Quarter Ended September 30 -------------------- 1994 1993 -------- -------- Average Price Per Ton: Nitrogen $ 116 $ 116 DAP $ 150 $ 105 Potash $ 73 $ 72 Net Sales. Net sales increased 60.9% from $45.2 million for the quarter ended September 30, 1993, to $72.8 million for the quarter ended September 30, 1994, primarily as a result of increased sales volumes for nitrogen, potash and DAP fertilizers and higher sales prices for DAP. Nitrogen fertilizer sales increased 24.0% as a result of a 24.9% increase in tons sold offset by a .8% decrease in the average price per ton. Sales of DAP increased 158.1% as a result of an 80.3% increase in tons sold and a 43.2% increase in the average price per ton. Potash sales increased 126.8% as a result of a 122.5% increase in tons sold and a 1.9% increase in the average price per ton. Cost of Products Sold. Cost of products sold increased from $34.0 million for the quarter ended September 30, 1993, to $51.4 million for the quarter ended September 30, 1994. As a percentage of net sales, cost of products sold decreased from 75.2% to 70.7%. This decrease, as a percentage of net sales, reflects increased sales prices and a reduction in the cost per ton of nitrogen fertilizers and potash which was more than offset by an increase in the cost per ton of DAP. Nitrogen fertilizer cost per ton decreased due to lower maintenance and labor costs and lower prices paid for natural gas during the current year quarter. Maintenance and labor costs were higher in the quarter ended September 30, 1993, due to a scheduled biennial maintenance turnaround at the Company's Yazoo City facility in that quarter. DAP costs per ton increased as a result of higher raw materials costs. Potash costs per ton decreased as a result of increased production volume for the quarter ended September 30, 1994. Selling Expenses. Selling expenses decreased from $5.8 million for the quarter ended September 30, 1993, to $5.6 million for the quarter ended September 30, 1994. As a percentage of net sales, selling expenses decreased from 12.8% to 7.7%. Factors causing this decrease were increased sales prices, proportionately higher DAP sales which bear no delivery expense, and the utilization of more economic methods of transporting nitrogen products. Also during the current quarter, the Company sold more of its nitrogen products directly from production facilities, thereby eliminating delivery expense on those sales. General and Administrative Expenses. General and administrative expenses increased from $3.4 million for the quarter ended September 30, 1993, to $4.8 million for the quarter ended September 30, 1994. As a percentage of net sales, general and administrative expenses decreased from 7.5% to 6.6%. During the current quarter, the Company accrued employee incentives related to income levels. These incentives were accrued in later quarters during the prior fiscal year. The Company also experienced increases in retirement expense and property and use taxes. Additionally, a greater portion of payroll overhead costs were transferred to cost of products sold during the prior year quarter. Operating income. As a result of the above factors, operating income increased from $2.0 million for the quarter ended September 30, 1993, to $10.9 million for the quarter ended September 30, 1994, a 436% increase. Interest, Net. Net interest decreased from $1.1 million for the quarter ended September 30, 1993, to $.8 million for the quarter ended September 30, 1994, reflecting lower levels of borrowings due to the repayment of debt from the proceeds of a stock offering in August 1994, partially offset by higher interest rates paid. Income Tax Expense. Income tax expense increased from $.2 million for the quarter ended September 30, 1993, to $3.9 million for the quarter ended September 30, 1994. This increase is primarily due to higher earnings during the current quarter and an increase in the Company's effective tax rate resulting from the conversion from a cooperative to a regular business corporation on July 1, 1994. Income from Continuing Operations Before Cumulative Effect of Change in Accounting Principle. As a result of the foregoing, income from continuing operations before the cumulative effect of a change in accounting principle increased from $.8 million for the quarter ended September 30, 1993, to $5.8 million for the quarter ended September 30, 1994. Liquidity and Capital Resources ------------------------------- At September 30, 1993, the Company had cash and cash equivalents of $25.9 million, compared to $23.2 million at June 30, 1994, an increase of $2.7 million. Operating Activities. For the quarter ended September 30, 1994, net cash provided by operating activities was $5.1 million as compared to net cash used by operating activities of $5.2 million for the quarter ended September 30, 1993. During the current period, the Company's income from continuing operations, non-cash charges for depreciation and deferred taxes, and the effects of a reduction in accounts receivable, more than offset the effects of higher inventories and lower accounts payable and accrued liabilities. Investing Activities. Net cash used by investing activities was $8.3 million for the quarter ended September 30, 1994, and $4.1 million for the quarter ended September 30, 1993. This increase is primarily attributable to final payments of $8.8 million in the current year quarter related to the disposition of Newsprint South, Inc. These payments were partially offset by the receipt of option payments relating to the Company's Florida phosphate rock properties. Capital expenditures were $2.8 million during the quarter ended September 30, 1994. These expenditures were for improvements and modifications to the Company's facilities, including expenditures for the purchase of a new computer system. Financing Activities. Net cash provided by financing activities was $5.9 million and $4.2 million, respectively, for the quarters ended September 30, 1994, and September 30, 1993. During the current 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 current quarter, the Company paid $4.5 million to its stockholders related to the reorganization of the Company. The Company and its subsidiaries have commitments from various banks for short-term borrowings up to $55.0 million, which includes $35.0 million from the National Bank for Cooperatives ("CoBank"). The lines of credit available through CoBank expire in October 1994, and will not be renewed. Short- term borrowings outstanding at September 30, 1994, were $7.8 million compared to $7.0 million at June 30, 1994, an increase of $.8 million. In addition to its short-term lines, the Company also has a $50.0 million long-term revolving credit facility with NationsBank that bears interest at the prime rate or for fixed periods at interest rates related to the London Interbank Offered Rates ("LIBOR") or U.S. Treasury notes. At September 30, 1994, 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 maximum combined amount outstanding under the short-term lines and the revolving credit facility at any month-end for the quarter ended September 30, 1994 was $16.2 million. 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. Exhibits and Reports on Form 8-K. (a) Exhibits (numbered in accordance with Item 601 of Regulation S-K (27) Financial Data Schedule (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: November 1, 1994 /s/ William F. Hawkins William F. Hawkins Senior Vice President - Finance and Administration Date: November 1, 1994 /s/ Rosalyn B. Glascoe Rosalyn B. Glascoe Corporate Secretary EX-27 2
5 This schedule contains first quarter summary financial information extracted from Mississippi Chemical Corporation 1995 first quarter Form 10-Q and is qualified in its entirety by reference to such Form 10-Q filing. 1,000 QTR-1 JUN-30-1994 SEP-30-1994 25,924 0 29,664 (500) 40,634 108,683 369,724 (256,145) 292,396 61,685 0 229 0 0 0 292,396 72,751 72,751 51,415 61,875 437 0 800 9,639 3,863 5,776 0 0 0 5,776 0.27 0
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