0000950152-95-001790.txt : 19950815
0000950152-95-001790.hdr.sgml : 19950815
ACCESSION NUMBER: 0000950152-95-001790
CONFORMED SUBMISSION TYPE: 10-Q
PUBLIC DOCUMENT COUNT: 2
CONFORMED PERIOD OF REPORT: 19950630
FILED AS OF DATE: 19950814
SROS: NASD
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: OGLEBAY NORTON CO
CENTRAL INDEX KEY: 0000073918
STANDARD INDUSTRIAL CLASSIFICATION: WATER TRANSPORTATION [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: 95562844
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 10-Q
1
Sequential Page 1 of 12 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 June 30, 1995 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 July 31, 1995: 2,471,976
---------
Index on sequential page 2.
2
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
INDEX
SEQUENTIAL
PAGE NUMBER
-----------
PART I. FINANCIAL INFORMATION
------------------------------
Consolidated Condensed Balance
Sheet (Unaudited) - June 30, 1995 and
December 31, 1994 3
Consolidated Condensed Statement of
Operations (Unaudited) - Three Months
Ended June 30, 1995 and 1994 and Six
Months Ended June 30, 1995 and 1994 4
Consolidated Condensed Statement of
Cash Flows (Unaudited) - Six Months
Ended June 30, 1995 and 1994 5
Notes to Consolidated Condensed Financial
Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7 - 10
PART II. OTHER INFORMATION 11 - 12
---------------------------
3
PART I. FINANCIAL INFORMATION
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)
ASSETS
JUNE 30 December 31
1995 1994
------------ ------------
CURRENT ASSETS
Cash and cash equivalents $ 2,541,611 $ 17,720,419
Investments 5,429,250 5,772,650
Accounts receivable, less
allowances (1995-$433,000;
1994-$440,000) 30,974,741 32,035,408
Inventories
Raw materials and finished products 3,910,813 3,846,094
Operating supplies 2,159,852 2,261,747
----------- ------------
6,070,665 6,107,841
Deferred income taxes 2,262,246 2,213,246
Prepaid insurance and other expenses 8,118,903 2,237,793
----------- ------------
TOTAL CURRENT ASSETS 55,397,416 66,087,357
INVESTMENTS 10,647,467 10,563,835
PROPERTIES AND EQUIPMENT 319,557,706 314,843,362
Less allowances for depreciation
and amortization 161,593,872 156,886,610
------------ ------------
157,963,834 157,956,752
PREPAID PENSION COSTS AND OTHER ASSETS 26,943,287 26,205,459
----------- ------------
$250,952,004 $260,813,403
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
JUNE 30 December 31
1995 1994
------------ ------------
CURRENT LIABILITIES
Current portion
of long-term debt $ 8,476,450 $ 8,476,450
Accounts payable 6,362,502 4,569,067
Payrolls and other accrued compensation 4,520,559 7,057,615
Accrued taxes and other expenses 12,314,001 16,013,208
Income taxes 1,317,476 2,270,951
Reserve for capacity rationalization 3,500,000 6,312,600
------------ ------------
TOTAL CURRENT LIABILITIES 36,490,988 44,699,891
LONG-TERM DEBT, less current portion 52,879,350 57,117,575
POSTRETIREMENT BENEFITS OBLIGATION 31,679,236 31,071,022
OTHER LONG-TERM LIABILITIES 22,661,845 24,019,063
DEFERRED INCOME TAXES 19,679,931 19,152,931
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 9,043,251 9,035,841
Unrealized gains 2,184,805 2,278,273
Retained earnings 104,198,026 101,173,484
------------ ------------
119,052,748 116,114,264
Treasury stock, at cost - 1,154,690
and 1,143,540 shares at respective dates (29,586,294) (29,217,318)
Unallocated Employee Stock Ownership
Plan shares (1,905,800) ( 2,144,025)
------------ ------------
87,560,654 84,752,921
------------ ------------
$250,952,004 $260,813,403
============ ============
See notes to consolidated condensed financial statements.
-3-
4
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30 June 30
------------------------------------- ---------------------------------
1995 1994 1995 1994
---- ---- ---- ----
REVENUES
Net sales $ 27,418,927 $ 28,677,654 $ 51,177,891 $ 57,816,621
Operating revenues 29,014,104 24,808,818 30,340,197 26,087,073
Sales commissions, royalties
and management fees 1,063,220 965,560 1,909,515 1,917,913
------------- ------------- ------------- ------------
57,496,251 54,452,032 83,427,603 85,821,607
COSTS AND EXPENSES
Cost of goods sold 22,562,407 25,096,632 42,607,291 50,131,362
Operating expenses 23,728,773 20,865,540 24,498,358 22,000,516
General, administrative and
selling expenses 3,929,843 4,056,843 7,944,727 8,268,018
Reserve for doubtful accounts 80,561 31,844 156,645 89,938
------------- ------------- ------------- ------------
50,301,584 50,050,859 75,207,021 80,489,834
INCOME FROM OPERATIONS 7,194,667 4,401,173 8,220,582 5,331,773
Gain on sale of assets 456,358 6,984,053 978,839 7,386,243
Interest, dividends and other income 235,604 315,171 718,296 585,730
Other expense ( 815,641) ( 501,920) (1,420,875) ( 883,065)
Interest expense (1,148,281) (1,392,442) (2,382,870) (2,808,424)
------------- ------------- ------------- -------------
INCOME BEFORE INCOME TAXES 5,922,707 9,806,035 6,113,972 9,612,257
Income taxes 1,548,000 2,968,000 1,602,000 2,917,000
------------- ------------- ------------- -------------
NET INCOME $ 4,374,707 $ 6,838,035 $ 4,511,972 $ 6,695,257
============ ============ =========== ============
NET INCOME PER SHARE OF COMMON STOCK $ 1.77 $ 2.75 $ 1.82 $ 2.69
============ ============ =========== ============
DIVIDENDS PER SHARE OF COMMON STOCK $ .30 $ .20 $ .60 $ .40
============ ============ =========== ============
Average number of shares of Common Stock
outstanding 2,475,347 2,491,291 2,478,353 2,492,339
See notes to consolidated condensed financial statements.
-4-
5
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30
-------------------------------------------
1995 1994
---- ----
OPERATING ACTIVITIES
Net income $ 4,511,972 $ 6,695,257
Adjustments to reconcile net income to
net cash provided by (used in) operating activities:
Depreciation and amortization 5,759,330 5,686,366
Deferred income taxes 526,000 750,000
Gain on sale of assets ( 978,839) (7,386,243)
Prepaid pension costs and other assets ( 1,231,778) (1,182,450)
Deferred vessel maintenance costs ( 5,684,541) (5,246,827)
Decrease (increase) in accounts receivable 1,060,667 (1,054,112)
Decrease (increase) in inventories 37,176 ( 447,671)
Increase (decrease) in accounts payable 1,793,435 2,198,462
Increase (decrease) in payrolls and other accrued
compensation ( 2,537,057) ( 951,154)
Increase (decrease) in accrued expenses ( 1,624,687) 991,096
Increase (decrease) in income taxes ( 953,475) 1,057,411
Other operating activities ( 2,345,302) 1,040,545
------------ -----------
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES ( 1,667,099) 2,150,680
INVESTING ACTIVITIES
Purchase of properties and equipment ( 4,997,006) (3,156,101)
Proceeds from sale of assets 1,206,526 10,734,898
Iron Ore and other investments ( 3,126,598) (1,671,180)
------------ -----------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES ( 6,917,078) 5,907,617
FINANCING ACTIVITIES
Payments on long-term debt ( 4,738,225) (16,201,439)
Dividends paid ( 1,487,430) ( 996,551)
Purchase of treasury stock ( 368,976) ( 288,564)
------------- -------------
NET CASH USED IN FINANCING ACTIVITIES ( 6,594,631) (17,486,554)
------------ ------------
Decrease in cash and cash equivalents ( 15,178,808) ( 9,428,257)
CASH AND CASH EQUIVALENTS, JANUARY 1 17,720,419 21,243,064
------------ ------------
CASH AND CASH EQUIVALENTS, JUNE 30 $ 2,541,611 $ 11,814,807
============ ============
See notes to consolidated condensed financial statements.
-5-
6
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
condensed 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 1995 consolidated condensed financial statement presentation. For
further information, refer to the consolidated financial statements and
notes thereto included in the Registrant's 1994 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 the Registrant's
Marine Transportation segment which historically does not generate revenues
in the first quarter of the year due to weather conditions on the Great
Lakes.
3. On April 13, 1995, the Registrant paid a final installment of $1,406,000
representing its portion of Eveleth Mines debt, originally due on August 1,
1995.
4. On March 2, 1995, the Registrant sold for cash certain undeveloped clay
properties located in Tennessee resulting in a $520,000 pretax gain.
5. On June 24, 1994, the Registrant sold for cash its Ceredo coal dock
business resulting in a $6,518,000 pretax gain.
6. On July 6, 1995, the Registrant sold for cash the idled vessel S/S Crispin
Oglebay resulting in a pretax gain of $1,769,000 which will be included in
the Registrant's third quarter results.
-6-
7
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Due to the seasonal nature of the Registrant's Marine Transportation
segment, the operating results and cash flows for the first half of the year
are not necessarily indicative of the results to be expected for the full year.
The Registrant's Marine Transportation segment historically does not generate
revenues in the first quarter of the year due to weather conditions on the
Great Lakes.
FINANCIAL CONDITION
-------------------
At June 30, 1995 the Registrant's net current assets were $18,906,000 as
compared to $21,387,000 at December 31, 1994. 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 final payments of the
Registrant's portion of Eveleth Mines debt.
The Registrant purchased 12,150 shares and 12,700 shares of its Common
Stock on the open market and placed these shares in treasury in the first half
of 1995 and 1994, respectively. The Registrant issued 1,000 shares of its
Common Stock from treasury to the Oglebay Norton Company Director Stock Plan in
the first half of 1995. The Registrant declared and paid dividends of $.30 per
share in the second quarter of 1995 and $.60 per share in the first half of
1995. The Registrant declared and paid dividends of $.20 per share in the
second quarter of 1994 and $.40 per share in the first half of 1994.
During the first half of 1995, the Registrant sold for cash certain
undeveloped clay properties in Tennessee resulting in a $520,000 pretax gain.
The Registrant sold current investments resulting in pretax gains of $303,000
and $713,000 during the first half of 1995 and 1994, respectively. During the
second quarter of 1994, the Registrant sold for cash its Ceredo coal dock
business resulting in a $6,518,000 pretax gain.
On July 6, 1995, the Registrant sold for cash the idled vessel S/S Crispin
Oglebay resulting in a pretax gain of $1,769,000 which will be included in the
Registrant's third quarter results.
Cash flow from operations in the first half of 1995 declined $3,818,000
compared to the first half of 1994 mainly due to the payment of liabilities
accrued at the end of 1994 related to additional pellet tonnage sold by the
Registrant's Iron Ore segment. Expenditures for property and equipment
amounted to $4,997,000 and $3,156,000 in the first half of 1995 and 1994,
respectively. Capital expenditures include vessel inspection costs of
$2,037,000 in the first half of 1995 and $1,303,000 in the first half of 1994.
Also included in the first half of 1995 is $1,020,000 of vessel improvements.
The Registrant repaid a total of $4,758,000 of its debt in the first half of
1995 compared with $16,201,000 for the same period in 1994. Included in 1994
is a $10,000,000 reduction in revolving credit debt with no balance presently
outstanding in 1995. Anticipated cash flows from operations and current
financial resources are expected to meet the Registrant's needs during the
remainder of 1995.
-7-
8
RESULTS OF OPERATIONS
---------------------
SIX MONTHS ENDED JUNE 30, 1995 COMPARED TO
SIX MONTHS ENDED JUNE 30, 1994
The Registrant's consolidated net income for the first half of 1995 was
$4,512,000 or $1.82 per share on consolidated revenues of $83,428,000 compared
to net income of $6,695,000 or $2.69 per share on revenues of $85,822,000 for
the first half of 1994. Consolidated revenues for the first half of 1995
declined 3% compared to the first half of 1994 due mainly to a 50% decline in
revenues for the Registrant's Iron Ore segment as discussed below.
During the first half of 1995 the Registrant sold for cash certain
undeveloped clay properties located in Tennessee resulting in a $520,000 pretax
gain. Net income for the first half of 1995 increased $343,000 or $.14 per
share as a result of the gain. The Registrant sold current investments
resulting in pretax gains of $303,000 and $713,000 during the first half of
1995 and 1994, respectively. As a result of the gains, net income increased
$200,000 or $.08 per share and $471,000 or $.19 per share in the first half of
1995 and 1994, respectively. During the second quarter of 1994 the Registrant
sold for cash its Ceredo coal dock business located in West Virginia resulting
in a $6,518,000 pretax gain. Net income for the first half of 1994 increased
$4,302,000 or $1.73 per share as a result of the gain. Excluding these gains,
netincome was $3,969,000 or $1.60 per share for the first half of 1995 and
$1,922,000 or $.77 per share for the first half of 1994.
Interest expense declined 15% in the first half of 1995, compared to the
same period in the prior year, due to the refinancing of a portion of the
Registrant's long-term debt in December 1994 and an overall reduction in debt.
Operating results of the Registrant's business segments for the six months
ended June 30, 1995 and 1994 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
increased 24% to $30,340,000 for the first half of 1995 compared to $24,481,000
for the same period in 1994. The segment's operating profit of $4,268,000 for
the first half of 1995 increased 82% compared to $2,340,000 for the same period
in 1994. The improved results are due to higher volume and better pricing as
demand for iron ore, coal and limestone transportation remains high. As a
result of good weather, eleven of the twelve vessels currently in operation
began sailing in March of 1995. Due to severe ice conditions on the Great
Lakes, the start of the Registrant's 1994 shipping season was delayed into
April.
-8-
9
RESULTS OF OPERATIONS (CONTINUED)
---------------------
SIX MONTHS ENDED JUNE 30, 1995 COMPARED TO
SIX MONTHS ENDED JUNE 30, 1994
Net sales, royalties and management fees for the Registrant's Iron Ore
segment declined 50% to $13,353,000 for the first half of 1995 compared to
$26,516,000 for the first half of 1994. The segment's operating profit for the
first half of 1995 declined 46% to $1,959,000 compared to $3,644,000 the first
half of 1994. In 1995, the Registrant is limited to its annual allotment of
775,000 gross tons of iron ore pellets under its Eveleth Mines agreements as
the other owners have nominated their full contractual tonnage. Additional
pellet tonnage was available to the Registrant to sell in 1994, as other owners
elected not to claim their full share of Eveleth production. Eveleth Mines
plans to produce near its capacity of 5,400,000 tons of pellets in 1995
compared to 5,000,000 tons in 1994.
Net sales for the Registrant's Industrial Sands segment amounted to
$20,515,000 for the first half of 1995, a 52% increase over sales of
$13,466,000 for the first half of 1994. The segment's operating profit of
$4,106,000 for the first half of 1995 more than tripled compared to $1,237,000
for the first half of 1994. Tonnage sold increased, principally as a result of
the 1994 fourth quarter acquisition of additional sand assets in Texas.
Favorable pricing and a beneficial product mix also contributed to the improved
results.
Net sales for the Registrant's Refractories & Minerals segment amounted to
$19,220,000 for the first half of 1995, which was a decrease of 2% compared to
$19,515,000 for the first half of 1994. Operating profit for the segment was
$140,000 for the first half of 1995 which was 85% less when compared to
$908,000 for the first half of 1994. Operating profit for this segment was
negatively impacted by a 29% decline in sales of tundish coating products and
by increased raw material costs in its ingot hot topping operations. The
decline in operating profit was somewhat offset by improved operating results
in its metallurgical treatment operations.
THREE MONTHS ENDED JUNE 30, 1995 COMPARED TO
THREE MONTHS ENDED JUNE 30, 1994
The Registrant's 1995 second quarter consolidated net income was $4,375,000
or $1.77 per share on consolidated revenues of $57,496,000 compared to net
income of $6,838,000 or $2.75 per share on revenues of $54,452,000 for the same
quarter in 1994. Consolidated revenues for the second quarter of 1995 improved
6% compared to the second quarter of 1994 on higher volume and favorable
pricing in the Registrant's Marine Transportation and Industrial Sands
segments, partially offset by decreased tonnage in the Registrant's Iron Ore
segment.
-9-
10
RESULTS OF OPERATIONS (CONTINUED)
---------------------
THREE MONTHS ENDED JUNE 30, 1995 COMPARED TO
THREE MONTHS ENDED JUNE 30, 1994
As previously discussed, the Registrant sold its Ceredo coal handling dock
resulting in a $6,518,000 pretax gain in the second quarter of 1994. Second
quarter net income increased $4,302,000 of $1.73 per share as a result of the
gain. Excluding this gain, net income was $2,536,000 or $1.02 per share for the
second quarter of 1994.
Interest expense declined 18% in the second quarter of 1995, 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 1994 and an overall reduction in debt.
Operating results of the Registrant's business segments for the second
quarter ended June 30, 1995 and 1994 are discussed below. The comments set
forth above in the six month comparison generally apply when comparing the
second quarter of 1995 to the same period in 1994.
Operating revenues for the Registrant's Marine Transportation segment of
$29,014,000 for the second quarter of 1995 improved 21% compared to $24,003,000
for the second quarter of 1994. The segment's operating profit of $4,486,000
for the second quarter of 1995 improved 46% compared to $3,067,000 for the
second quarter of 1994.
Net sales, royalties and management fees for the Registrant's Iron Ore
segment declined to $8,030,000 for the second quarter of 1995 compared to
$12,446,000 for the second quarter of 1994. The segment's 1995 second quarter
operating profit was $1,155,000 compared to $1,452,000 for the second quarter
of 1994.
Net sales for the Registrant's Industrial Sands segment amounted to
$11,200,000 for the second quarter of 1995, a 55% increase from 1994 second
quarter sales of $7,232,000. The segment's 1995 second quarter operating
profit of $2,697,000 increased 180% from the 1994 second quarter profit of
$964,000 due to additional tonnage sold, favorable pricing and a beneficial
product mix.
Net sales for the Registrant's Refractories & Minerals segment amounted to
$9,252,000 for the second quarter of 1995, which was a 6% decline compared to
$9,891,000 for the second quarter of 1994 due mainly to lower sales of its
tundish coating products. Operating profit for the segment was $29,000 for the
second quarter of 1995 compared to $384,000 for the second quarter of 1994.
-10-
11
PART II. OTHER INFORMATION
---------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
------- -----------------------------------------------------
The Registrant submitted for approval by the shareholders at the annual
meeting held April 26, 1995, nominees for election as directors with terms
expiring in 1998 the following candidates: Malvin E. Bank, William G.
Bares, and John D. Weil. The shareholders voted as follows:
For Withheld
--- --------
Malvin E. Bank 2,223,483 3,916
William G. Bares 2,221,452 5,947
John D. Weil 2,225,105 2,294
The Registrant also submitted for approval by the shareholders at the
annual meeting the Oglebay Norton Company Director Stock Plan. The Stock
Plan was approved by 2,116,883 votes in favor of adopting the Stock Plan.
The shareholders voted 87,305 against adoption; 18,212 votes abstained and
4,999 non-votes were recorded, respectively.
-11-
12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
------- --------------------------------
(a) Exhibits
(27) - Financial Data Schedule
(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: August 14, 1995 By: /s/ R. J. Kessler
------------------------
R. J. Kessler
Vice President -
Finance and Development
On behalf of the Registrant
and as Principal Financial
and Accounting Officer
-12-
EX-27
2
OGLEBAY NORTON 10-Q EX-27
5
1
US DOLLARS
6-MOS
DEC-31-1995
JAN-01-1995
JUN-30-1995
1
2,541,611
5,429,250
30,974,741
433,000
6,070,665
55,397,416
319,557,706
161,593,872
250,952,004
36,490,988
52,879,350
3,626,666
0
0
83,933,988
250,952,004
51,177,891
83,427,603
42,607,291
75,207,021
1,420,875
156,645
2,382,870
6,113,972
1,602,000
4,511,972
0
0
0
4,511,972
1.82
1.82