-----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, IWvpZdSV4WKkEfajnKw+0iNGqhsLylNwDnYU1RHSLu89grIxWn4HyBxNWD5Vgtdm vUDSrD7+FMveC4wikSja0g== 0000950152-94-000541.txt : 19940518 0000950152-94-000541.hdr.sgml : 19940518 ACCESSION NUMBER: 0000950152-94-000541 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OGLEBAY NORTON CO CENTRAL INDEX KEY: 0000073918 STANDARD INDUSTRIAL CLASSIFICATION: 4400 IRS NUMBER: 340158970 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-00663 FILM NUMBER: 94528734 BUSINESS ADDRESS: STREET 1: 1100 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114-2598 BUSINESS PHONE: 2168613300 MAIL ADDRESS: STREET 1: 1100 SUPERIOR AVENUE CITY: CLEVELAND STATE: OH ZIP: 44114-2598 10-Q 1 OGLEBAY NORTON CO. 10-Q 1 Sequential Page 1 of 9 Pages SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended March 31, 1994 Commission File number 0-663 -------------- OGLEBAY NORTON COMPANY ----------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 34-0158970 - - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1100 Superior Avenue Cleveland, Ohio 44114-2598 - - ----------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 216 861-3300 ------------ None --------------------------------------------------- Former name, former address and former fiscal year, if changed since last report 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, and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Shares of Common Stock outstanding at April 30, 1994: 2,491,326 --------- Index on sequential page 2. 2 OGLEBAY NORTON COMPANY AND SUBSIDIARIES INDEX
Sequential Page Number ----------- Part I. Financial Information ------------------------------ Consolidated Condensed Balance Sheet (Unaudited) - March 31, 1994 and December 31, 1993 3 Consolidated Condensed Statement of Operations (Unaudited) - Three Months Ended March 31, 1994 and 1993 4 Consolidated Condensed Statement of Cash Flows (Unaudited) - Three Months Ended March 31, 1994 and 1993 5 Notes to Consolidated Condensed Financial Statements 6 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 - 8 Part II. Other Information 9 ---------------------------
3 Part I. FINANCIAL INFORMATION OGLEBAY NORTON COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)
ASSETS ------ March 31 December 31 1994 1993 ------------ ------------ CURRENT ASSETS Cash and cash equivalents $ 12,165,567 $ 21,243,064 Investments 6,482,400 -0- Accounts receivable less allowances (1994-$2,047,000; 1993-$2,082,000) 20,781,590 28,291,306 Inventories Raw materials and finished products 4,350,581 4,354,120 Operating supplies 2,299,018 2,305,719 ------------ ------------ 6,649,599 6,659,839 Deferred income taxes 2,591,985 3,801,985 Prepaid insurance and other expenses 7,089,352 2,191,166 ------------ ------------ TOTAL CURRENT ASSETS 55,760,493 62,187,360 INVESTMENTS AND LONG-TERM RECEIVABLES 11,483,262 14,871,623 PROPERTIES AND EQUIPMENT 319,454,306 319,392,610 Less allowances for depreciation and amortization 156,681,163 156,962,679 ------------ ------------ 162,773,143 162,429,931 PREPAID PENSION COSTS AND OTHER ASSETS 19,889,350 20,228,456 ------------ ------------ $249,906,248 $259,717,370 ============ ============
4 Part I. FINANCIAL INFORMATION OGLEBAY NORTON COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ March 31 December 31 1994 1993 ------------ ------------ CURRENT LIABILITIES Current portion of long-term debt $ 11,083,057 $ 11,189,664 Accounts payable 3,905,145 4,021,985 Payrolls and other accrued compensation 2,258,479 4,828,016 Accrued taxes and other expenses 14,075,424 12,772,672 Income taxes (1,088,393) 733,414 Reserve for capacity rationalization 6,312,600 6,312,600 ------------ ------------ TOTAL CURRENT LIABILITIES 36,546,312 39,858,351 LONG-TERM DEBT, less current portion 63,974,913 69,344,025 POSTRETIREMENT BENEFITS OBLIGATION 30,671,316 30,285,278 OTHER LONG-TERM LIABILITIES 27,837,600 30,958,323 DEFERRED INCOME TAXES 19,353,153 19,398,153 STOCKHOLDERS' EQUITY Preferred stock, without par value, authorized 5,000,000 shares; none issued -0- -0- Common stock, par value $1 per share, authorized 10,000,000 shares; issued 3,626,666 shares 3,626,666 3,626,666 Additional capital 8,988,043 8,988,043 Unrealized gains 2,348,564 -0- Retained earnings 88,132,852 88,773,915 ------------ ------------ 103,096,125 101,388,624 Treasury stock, at cost - 1,135,240 and 1,122,740 shares at respective dates (28,965,201) (28,681,694) Unallocated Employee Stock Ownership Plan shares ( 2,607,970) ( 2,833,690) ------------ ------------ 71,522,954 69,873,240 ------------ ------------ $249,906,248 $259,717,370 ============ ============ See notes to consolidated condensed financial statements.
-3- 5 OGLEBAY NORTON COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)
Three Months Ended March 31 ------------------------------------- 1994 1993 ---- ---- REVENUES Net sales $ 29,138,967 $ 15,090,982 Operating revenues 1,278,255 1,414,081 Sales commissions, royalties and management fees 952,353 710,607 Gain on sale of assets 402,190 29,635 Interest, dividends and other income 270,559 334,771 ------------ ------------ 32,042,324 17,580,076 COSTS AND EXPENSES Cost of goods sold 25,034,730 13,318,944 Operating expenses 1,134,976 1,304,866 General, administrative and selling expenses 4,211,175 3,865,088 Reserve for doubtful accounts 58,094 46,338 Other expense 381,145 246,881 Interest expense 1,415,982 1,790,198 ------------ ------------ 32,236,102 20,572,315 Income (loss) before income taxes (193,778) (2,992,239) Income taxes (benefit) ( 51,000) ( 904,000) ------------ ------------ NET INCOME (LOSS) $ (142,778) $ (2,088,239) ============ ============ NET INCOME (LOSS) PER SHARE OF COMMON STOCK $ (.06) $ (.83) ============ ============ DIVIDENDS PER SHARE OF COMMON STOCK $ .20 $ .20 ============ ============ Average number of shares of Common Stock outstanding 2,493,398 2,512,926 See notes to consolidated condensed financial statements.
- 4 - 6 OGLEBAY NORTON COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31 ------------------------------------- 1994 1993 ---- ---- OPERATING ACTIVITIES Net income (loss) $ ( 142,778) $ ( 2,088,239) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 1,460,491 1,238,455 Deferred income taxes ( 45,000) 127,710 Gain on sale of assets ( 402,190) ( 29,635) Prepaid pension costs and other assets 161,258 ( 166,851) Deferred vessel maintenance costs (4,245,270) ( 5,235,864) Decrease (increase) in accounts receivable 7,718,808 5,684,039 Decrease (increase) in inventories 10,240 ( 170,763) Increase (decrease) in accounts payable ( 116,840) 45,708 Increase (decrease) in income taxes (1,821,807) ( 1,062,148) Increase (decrease) in accrued taxes and other accruals (1,157,675) ( 1,714,706) Other operating activities (1,661,315) ( 6,174,052) ------------ ------------ NET CASH USED IN OPERATING ACTIVITIES ( 242,078) ( 9,546,346) INVESTING ACTIVITIES Proceeds from sale of assets 652,748 29,833 Purchase of properties and equipment (1,295,690) ( 542,650) Investments in Iron Ore (1,434,966) ( 1,417,710) ------------ ------------ NET CASH USED IN INVESTING ACTIVITIES (2,077,908) ( 1,930,527) FINANCING ACTIVITIES Payments on long-term debt (5,975,720) ( 975,720) Dividends paid ( 498,285) ( 502,585) Purchase of treasury stock ( 283,506) -0- ------------ ------------ NET CASH USED IN FINANCING ACTIVITIES (6,757,511) ( 1,478,305) ------------ ------------ Decrease in cash and cash equivalents (9,077,497) (12,955,178) CASH AND CASH EQUIVALENTS, JANUARY 1 21,243,064 23,332,342 ------------ ------------ CASH AND CASH EQUIVALENTS, MARCH 31 $ 12,165,567 $ 10,377,164 ============ ============ See notes to consolidated condensed financial statements.
-5- 7 OGLEBAY NORTON COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 1. The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and notes to the consolidated financial statements necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. Management of the Registrant, however, believes that all adjustments considered necessary for a fair presentation of the results of operations for such period have been made. Certain amounts in the prior year have been reclassified to conform with the 1994 consolidated condensed financial statement presentation. For further information, refer to the consolidated financial statements and notes thereto included in the Registrant's 1993 annual report on Form 10-K. 2. Operating results are not necessarily indicative of the results to be expected for the year, due to the seasonal nature of certain aspects of the Registrant's business. 3. The Registrant's wholly owned subsidiary Saginaw Mining Company, ceased operation of its St. Clairsville, Ohio coal mine on August 28, 1992, and began the mine closing process. Permanent closure of the mine was completed in 1993. Closure costs of this discontinued operation are being fully funded by a public utility customer, as required by contract. Final settlement and funding of the closure costs has been extended to July 31, 1994, at the request of the customer. Remaining liabilities related to the discontinued operation are included in the accounts of the Registrant on the consolidated condensed balance sheet. 4. In 1993, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities". The Registrant adopted the provisions of the new standard, effective January 1, 1994, and increased stockholders' equity by $2,971,792 (net of $1,531,000 in income taxes) to reflect unrealized holding gains on investments reported as available-for-sale. Unrealized holding gains of $2,348,564 (net of $1,210,000 in income taxes) are included in stockholders' equity at March 31, 1994. In accordance with the Statement, prior year financial statements have not been restated for the accounting change. 5. Available-for-sale investments are carried at fair value, based on quoted market prices, and are reported as a current asset in the consolidated condensed balance sheet. Realized gains and losses on the sale of such investments are based on average cost. In 1993, the Registrant reported these investments at the lower of cost or market and as long-term. -6- 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Due to the seasonal nature of certain aspects of the Registrant's business, the operating results and cash flows for the first three months of the year are not necessarily indicative of the results to be expected for the full year. FINANCIAL CONDITION ------------------- At March 31, 1994 the Registrant's net current assets were $19,215,000 as compared to $22,329,000 at December 31, 1993. Net current assets declined from the end of last year primarily as a result of the purchase of properties and equipment, the reduction of long-term debt and other liabilities, the payment of dividends, the purchase of Treasury Stock, and the payment of the Registrant's portion of Eveleth Mines debt. This decline was partially offset by the reclassification of available-for-sale investments to current assets. During the first quarter of 1994, the Registrant purchased 12,500 shares of its Common Stock on the open market and placed these shares in treasury. The Registrant declared and paid dividends of $.20 per share in the first quarter of 1994 and 1993. Cash flow from operations in the first quarter of 1994 improved from the first quarter of 1993 and was very close to breakeven. This represents strong cash flow performance for the Registrant in a period of traditionally slow seasonal business activity. As a result of its improved cash position, the Registrant repaid a total of $5,000,000 of its revolving credit long-term borrowings in January and February of 1994. Anticipated cash flows from operations and current financial resources are expected to meet the Registrant's needs during the remainder of 1994. RESULTS OF OPERATIONS --------------------- THREE MONTHS ENDED MARCH 31, 1994 COMPARED TO THREE MONTHS ENDED MARCH 31, 1993 The Registrant's 1994 first quarter consolidated net loss was $143,000 or $.06 per share on consolidated revenues of $32,042,000 compared to a net loss of $2,088,000 or $.83 per share on revenues of $17,581,000 for the same quarter in 1993. Consolidated net sales, operating revenues, sales commissions, royalties and management fees amounted to $31,370,000 in the first quarter of 1994, an 82% improvement over the 1993 first quarter level of $17,216,000. The Company's first quarter results reflect the seasonal nature of a substantial portion of its business and are not indicative of the results anticipated for the full year. In 1993, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities". As further described in Notes 4 and 5 to the consolidated condensed financial statements, the Registrant adopted the provisions of the new standard, effective January 1, 1994. Included in first quarter 1994 revenues is $339,000 of gains on the sale of available-for-sale investments. -7- 9 RESULTS OF OPERATIONS (Continued) THREE MONTHS ENDED MARCH 31, 1994 COMPARED TO THREE MONTHS ENDED MARCH 31, 1993 Interest expense declined 21% in the first quarter of 1994, compared to the same quarter in the prior year, due to the refinancing of a portion of the Registrant's long-term debt in December 1993 and an overall reduction in debt. Operating results of the Registrant's business segments for the first quarter ended March 31, 1994 and 1993 are discussed below. It is the policy of the Registrant to allocate certain corporate general and administrative expenses to its business segments. Operating revenues for the Registrant's Marine Transportation segment amounted to $478,000 for the first quarter of 1994 compared to $489,000 for the first quarter of 1993. The segment's operating loss of $727,000 for the first quarter of 1994 declined 8% compared to $794,000 for the first quarter of 1993. The improvement is primarily a result of shuttle service provided to a customer to transport iron ore within the Cuyahoga River during January and February. Due to severe ice conditions on the Great Lakes, the start of the Registrant's shipping season was delayed until April 1994. In 1993, the fleet began the shipping season with three vessels in March. Presently, eleven of the Registrant's vessels are in operation with a planned twelfth vessel to sail at the end of the second quarter. Net sales, royalties and management fees for the Registrant's Iron Ore segment increased to $14,070,000 for the first quarter of 1994 compared to $1,661,000 for the first quarter of 1993 as a result of additional tonnage requirements by consumers. The segment's 1994 first quarter operating profit of $2,191,000 compared to a profit of $53,000 for the first quarter of 1993. The improvement was attributable to new sales, coupled with cost containment efforts at the Registrant's Eveleth Mines iron ore operations. Net sales for the Registrant's Industrial Sands segment amounted to $6,236,000 for the first quarter of 1994, a 6% increase over 1993 first quarter sales of $5,866,000. The segment's 1994 first quarter operating profit of $273,000 was comparable to a $239,000 profit for the first quarter of 1993. Net sales for the Registrant's Refractories and Minerals segment, previously identified as the Manufacturing segment, amounted to $9,624,000 for the first quarter of 1994, which was a 20% improvement compared to $7,999,000 for the same period in 1993. Operating profit for the segment was $524,000 for the first quarter of 1994 which was a 24% improvement compared to $422,000 for the same period in 1993. Concentrated efforts to improve sales through product line diversification and technical assistance accounted for the increases in 1994. -8- 10 PART II. OTHER INFORMATION --------------------------- Item 6. Exhibits and Reports on Form 8-K - - ------ -------------------------------- (a) Exhibits - None (b) Reports on Form 8-K - None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OGLEBAY NORTON COMPANY DATE: May 16, 1994 By: ------------------------------ R. J. Kessler Vice President - Finance and Development On behalf of the Registrant and as Principal Financial and Accounting Officer -9- -----END PRIVACY-ENHANCED MESSAGE-----