-----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, LMlsPCN+Mi4+uoyWn2QI5yNqGlHEVuBMPeN8OXmJzeJHuYCBsujJ9OBmI78KgPVy u7mJCKcak3qirYDcaEnKQw== 0001047469-99-020090.txt : 19990514 0001047469-99-020090.hdr.sgml : 19990514 ACCESSION NUMBER: 0001047469-99-020090 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEORGIA GULF CORP /DE/ CENTRAL INDEX KEY: 0000805264 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INORGANIC CHEMICALS [2810] IRS NUMBER: 581563799 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09753 FILM NUMBER: 99620585 BUSINESS ADDRESS: STREET 1: 400 PERIMETER CTR TERRACE STREET 2: STE 595 CITY: ATLANTA STATE: GA ZIP: 30346 BUSINESS PHONE: 4043954500 10-Q 1 10-Q 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 THE QUARTERLY PERIOD ENDED MARCH 31, 1999 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ____________ Commission File Number 1-9753 -------------------- GEORGIA GULF CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 58-1563799 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 400 PERIMETER CENTER TERRACE, SUITE 595, ATLANTA, GEORGIA 30346 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (770) 395-4500 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.
OUTSTANDING AS OF CLASS MAY 11, 1999 ----- ------------ Common Stock, $0.01 par value..........................30,926,554 shares
GEORGIA GULF CORPORATION FORM 10-Q QUARTERLY PERIOD ENDED MARCH 31, 1999 INDEX
PAGE PART I. FINANCIAL INFORMATION NUMBERS ------- Item 1. Financial Statements Condensed Consolidated Balance Sheets as of March 31, 1999 and December 31, 1998....................................................... 1 Condensed Consolidated Statements of Income for the Three Months Ended March 31, 1999 and 1998........................................ 2 Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1999 and 1998........................................ 3 Notes to Condensed Consolidated Financial Statements as of March 31, 1999.............................................................. 4-6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...................................................... 7-9 Item 3. Quantitative and Qualitative Disclosures About Market Risk .................... 10 PART II.OTHER INFORMATION Item 1. Legal Proceedings.............................................................. 11 Item 6. Exhibits and Reports on Form 8-K............................................... 11 SIGNATURES............................................................................. 12
PART I. FINANCIAL INFORMATION. Item 1. Financial Statements. GEORGIA GULF CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
March 31, December 31, 1999 1998 ----------- ----------- ASSETS Cash and cash equivalents $ 1,500 $ 1,244 Receivables 64,253 61,203 Insurance receivable 33,311 9,030 Inventories 65,654 72,301 Prepaid expenses 2,922 3,562 Deferred income taxes 6,492 6,492 ----------- ----------- Total current assets 174,132 153,832 ----------- ----------- Property, plant and equipment, at cost 687,721 683,495 Less accumulated depreciation 293,225 282,346 ----------- ----------- Property, plant and equipment, net 394,496 401,149 ----------- ----------- Goodwill 84,534 85,154 ----------- ----------- Other assets 32,672 29,626 ----------- ----------- Total assets $ 685,834 $ 669,761 ----------- ----------- ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt $ 245,700 $ -- Accounts payable 69,664 66,459 Interest payable 4,178 2,272 Accrued compensation 4,612 6,814 Accrued pension 807 378 Other accrued liabilities 14,017 12,833 ----------- ----------- Total current liabilities 338,978 88,756 ----------- ----------- Long-term debt, net of current portion 224,925 459,475 ----------- ----------- Deferred income taxes 92,770 92,649 ----------- ----------- Stockholders' equity Common stock - $0.01 par value 309 309 Additional paid-in capital 218 -- Retained earnings 28,634 28,572 ----------- ----------- Total stockholders' equity 29,161 28,881 ----------- ----------- Total liabilities and stockholders' equity $ 685,834 $ 669,761 ----------- ----------- ----------- ----------- Common shares outstanding 30,911,954 30,883,754 ----------- ----------- ----------- -----------
See notes to condensed consolidated financial statements. 1 GEORGIA GULF CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except share data)
Three Months Ended March 31, --------------------------------- 1999 1998 ------------ ------------ Net sales $ 187,588 $ 232,705 ------------ ------------ Operating costs and expenses Cost of sales 165,932 187,699 Selling and administrative 10,342 10,745 ------------ ------------ Total operating costs and expenses 176,274 198,444 ------------ ------------ Operating income 11,314 34,261 Other income (expense) Interest, net (7,323) (7,126) ------------ ------------ Income before income taxes 3,991 27,135 Provision for income taxes 1,457 10,179 ------------ ------------ Net income $ 2,534 $ 16,956 ------------ ------------ ------------ ------------ Basic earnings per share $ 0.08 $ 0.52 ------------ ------------ ------------ ------------ Diluted earnings per share $ 0.08 $ 0.52 ------------ ------------ ------------ ------------ Weighted average common shares Basic 30,898,728 32,438,607 ------------ ------------ ------------ ------------ Diluted 31,133,780 32,721,604 ------------ ------------ ------------ ------------
2 See notes to condensed consolidated financial statements. 3 GEORGIA GULF CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
Three Months Ended March 31, ------------------------- 1999 1998 -------- -------- Cash flows from operating activities: Net income $ 2,534 $ 16,956 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 11,693 10,927 Change in operating assets, liabilities and other (18,641) 9,899 -------- -------- Net cash provided by (used in) operating activities (4,414) 37,782 -------- -------- Cash flows from financing activities: Long-term debt proceeds 39,150 37,000 Long-term debt payments (28,000) (31,200) Proceeds from issuance of common stock 218 981 Repurchase and retirement of common stock -- (30,884) Dividends paid (2,472) (2,564) -------- -------- Net cash provided by (used in) financing activities 8,896 (26,667) -------- -------- Cash flows from investing activities: Capital expenditures (4,226) (7,587) -------- -------- Net change in cash and cash equivalents 256 3,528 Cash and cash equivalents at beginning of period 1,244 1,621 -------- -------- Cash and cash equivalents at end of period $ 1,500 $ 5,149 -------- -------- -------- --------
4 See notes to condensed consolidated financial statements. 5 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and footnotes thereto included in the annual report for the year ended December 31, 1998 for Georgia Gulf Corporation and its subsidiaries (the "Company" or "Georgia Gulf"). Operating results for Georgia Gulf for the three-month period ended March 31, 1999, are not necessarily indicative of the results that may be expected for the year ending December 31, 1999. NOTE 2: NEW ACCOUNTING PRONOUNCEMENT During June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." The Statement establishes accounting and reporting standards requiring that every derivative instrument be recorded in the balance sheet as either an asset or liability measured at its fair value and that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. Special accounting for qualifying hedges allows derivative gains and losses to offset related results on the hedged item in the income statement, and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting. SFAS No. 133 is effective for fiscal years beginning after June 15, 1999, although earlier adoption is permitted. SFAS No. 133 can not be applied retroactively. Management has not yet quantified the impacts of adopting SFAS No. 133 on the Company's financial statements. NOTE 3: INVENTORIES The major classes of inventories were as follows (in thousands):
March 31, December 31, 1999 1998 --------- ----------- Raw materials and supplies $29,198 $26,462 Finished goods 36,456 45,839 ------- ------- $65,654 $72,301 ------- ------- ------- -------
6 NOTE 4: DERIVATIVE FINANCIAL INSTRUMENTS Georgia Gulf has two interest rate swap agreements for a total notional amount of $100,000,000 maturing in June 2002 to fix the interest rate on a term loan. Also, the Company has an interest rate swap agreement for a notional amount of $100,000,000 as a cash flow hedge for a cogeneration facility operating lease agreement. This interest rate swap agreement will mature August 2002. Georgia Gulf does not use derivatives for trading purposes. Interest rate swap agreements, a form of derivative, are used by the Company to manage interest costs on certain portions of the Company's long-term debt. These financial statements do not reflect temporary market gains and losses on derivative financial instruments. Amounts paid or received on the interest rate swap agreements are recorded to interest expense as incurred. As of March 31, 1999, and December 31, 1998, interest rate swap agreements were the only form of derivative financial instruments outstanding. The fair value of these swap agreements as of March 31, 1999 and December 31, 1998 was a payable of $3,796,000 and $6,412,000, respectively. NOTE 5: EARNINGS PER SHARE The numerator in basic and diluted earnings per share computations is reported net income. The following table reconciles the denominator for the basic and diluted earnings per share computations shown on the condensed consolidated statements of income (in thousands):
Three Months Ended March 31, ------------------ 1999 1998 ------ ------ Weighted average common shares - basic 30,899 32,439 Plus incremental shares from assumed conversions: Options 134 261 Employee stock purchase plan rights 101 22 ------ ------ Weighted average common shares - diluted 31,134 32,722 ------ ------ ------ ------
7 NOTE 6: SEGMENT INFORMATION SFAS No. 131 - "Disclosures about Segments of an Enterprise and Related Information" became effective for fiscal year 1998 and for all succeeding interim reporting periods. In accordance with the requirements of SFAS No. 131, the Company has identified three reportable segments through which it conducts its operating activities: chlorovinyls, aromatics and gas chemicals. These three segments reflect the organization used by Company management for internal reporting. The chlorovinyls segment is a highly integrated chain of products which includes chlorine, caustic soda, vinyl chloride monomer and vinyl resins and compounds. The aromatics segment is also vertically integrated and includes cumene and the co-products phenol and acetone. The third product segment, gas chemicals, includes methanol. Earnings of industry segments exclude interest income and expense, unallocated corporate expenses and general plant services, provision for income taxes, and income and expense items reflected as "other income (expense)" on the Company's consolidated statements of income. Intersegment sales and transfers are insignificant.
CORPORATE AND GENERAL CHLORO- GAS PLANT (In thousands) VINYLS AROMATICS CHEMICALS SERVICES TOTAL -------- --------- --------- -------- -------- QUARTER ENDED MARCH 31, 1999 Net sales $120,808 $ 58,456 $ 8,324 $ -- $187,588 Operating income (loss) 11,893 6,649 (4,023) (3,205) 11,314 - ------------------------------------------------------------------------------------- QUARTER ENDED MARCH 31, 1998 Net sales $126,824 $ 88,562 $ 17,319 $ -- $232,705 Operating income (loss) 16,285 20,347 1,379 (3,750) 34,261
NOTE 7: ACQUISITION On May 11, 1998, the Company acquired all the issued and outstanding common stock (the "Stock") of North American Plastics, Inc. ("North American Plastics"), a privately-held manufacturer of flexible polyvinyl chloride ("PVC") compounds with a production capacity of 190,000,000 pounds. North American Plastics has two manufacturing locations in Mississippi, with revenues for 1997 of approximately $90,000,000. Its PVC compounds are used in wire and cable for construction, automobiles and appliances, as well as various other consumer and industrial products. The Stock was acquired in exchange for net cash consideration of $99,902,000 plus the assumption of $500,000 in debt. The cash portion of the acquisition was financed with proceeds from the Company's existing revolving credit loan. The transaction was accounted for as a purchase and the consideration exchanged exceeded the fair market value of the net tangible assets of North American Plastics by approximately $87,000,000. This excess was allocated to goodwill and is being amortized on a straight-line basis over a period of 35 years. The results of operations of the acquired business have been included in Georgia Gulf's condensed consolidated financial statements from the date of acquisition. 8 Pro forma results of operations have not been presented because the effect of this acquisition was not significant. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. RESULTS OF OPERATIONS INDUSTRY OVERVIEW Georgia Gulf manufactures and markets products through two highly integrated lines categorized as chlorovinyls and aromatic chemicals; and also a third product line, methanol, a natural gas chemical. Georgia Gulf's chlorovinyl products include chlorine, caustic soda, sodium chlorate, vinyl chloride monomer ("VCM"), and polyvinyl chloride ("PVC") resins and compounds; Georgia Gulf's primary aromatic chemical products include cumene, phenol and acetone. For chlorovinyls, increased domestic chlorine/caustic capacity, together with weakness in the pulp and paper industry, has caused a significant deterioration in caustic soda pricing. Georgia Gulf consumes most of its chlorine capacity internally in the production of VCM, which is further processed into PVC resins and compounds. The PVC resin market has begun to tighten as increased demand for PVC resin has begun to absorb industry overcapacity. Upward pricing trends are expected to continue as no new resin capacity is expected for the next several years. The market demand for PVC compounds, which are more specialized products, has remained strong in early 1999, benefitting from the continued good overall domestic business environment. Aromatics industry operating rates were high in the early part of 1999. Although demand for phenol was strong due to continued strength in the polycarbonate and phenolic resin markets, prices are declining in anticipation of large capacity increases scheduled for 1999 and 2000. Prices for phenol's co-product, acetone, have experienced downward pressure due to the industry's high operating rates which has created an excess supply of acetone. The methanol market continues to suffer from overcapacity as significant increases in global supply have created an imbalance between supply and demand. As a result, several domestic methanol producers, including Georgia Gulf, have idled their methanol plants until such time as industry conditions improve. While these shutdowns, which began in 1998, have resulted in a supply contraction and an increase in spot prices during the first quarter of 1999, several new overseas methanol plants are scheduled to start-up in 1999. This additional supply will add further pressure on sales prices in the future. FIRST QUARTER OF 1999 COMPARED WITH THE FIRST QUARTER OF 1998: For the first quarter ended March 31, 1999, diluted earnings per share were $0.08 on net income of $2.5 million and net sales of $187.6 million. This compares with diluted earnings per share of $0.52, net income of $17.0 million and net sales of $232.7 million for the first quarter of 1998. Operating income for the first quarter of 1999 was $11.3 million, a decrease of 67 percent from $34.3 million for the same period in 1998. The average sales price of Georgia Gulf's products declined 12 percent for the period-to-period comparison as all products experienced lower pricing. Overall sales volumes declined by 9 percent as maintenance turnarounds at the chlorine/caustic soda and VCM plants during the first quarter of 1999 reduced the products available for sale. The reduced production volumes related to the maintenance turnarounds also resulted in higher fixed costs per unit which led to a decline in the gross margin percentage, in spite of lower raw material costs for the first quarter of 1999. 9 In chlorovinyls, operating income for the first quarter of 1999 was $11.9 million, a decrease of 27 percent from $16.3 million for the same period in 1998. This decrease was attributable to the maintenance turnarounds and lower pricing throughout the chlorovinyl chain. This was partially offset by improved results from vinyl resins and compounds and lower raw material costs in the first quarter of 1999, as well as the impact of North American Plastics, a manufacturer of flexible vinyl compounds which was acquired in May 1998. Operating income from aromatics was $6.6 million for the first quarter of 1999 compared to $20.3 million for the first quarter of 1998. Although raw material costs were lower for the first quarter of 1999, this benefit was more than offset by a significant decline in pricing, particularly for phenol and acetone. As a result of continued excess capacity and weakening demand in the global methanol market, Georgia Gulf's methanol plant remained idle during the first quarter of 1999. Georgia Gulf continues to supply customers with purchased methanol. The operating loss for gas chemicals was $4.0 million for the first quarter of 1999 compared with an operating profit of $1.4 million for the same period last year. This loss is attributable to ongoing fixed costs associated with the idled methanol plant and losses related to the buy/resell program. Interest expense increased to $7.3 million for the first quarter of 1999, compared with $7.1 million for the same period in 1998. LIQUIDITY AND CAPITAL RESOURCES Many of Georgia Gulf's commodity products are expected to face continued pricing pressure during 1999. As management anticipates lower cash flow from operations, investment in capital projects and stock repurchases will be curtailed in order to maintain debt and available credit at manageable levels. Management believes that cash provided by operations and the availability under Georgia Gulf's revolving credit facility will provide sufficient funds to support planned capital expenditures, dividends, working capital fluctuations and debt service requirements. For the three months ended March 31, 1999, Georgia Gulf used $4.4 million of cash flow for operating activities as compared with $37.8 million generated during the three months ended March 31, 1998. The "change in operating assets, liabilities and other" category for the first quarter of 1999 included the payment of $24 million in litigation expenses which will be reimbursed by Georgia Gulf's insurance carriers in the second quarter of 1999. Other significant working capital changes included a reduction of inventory attributable in large part to the maintenance turnarounds and an increase in payables due to the timing of payments. Changes in working capital during the first three months of 1998 were primarily attributable to a decrease in inventories offset in part by a lower accounts payable balance and higher accrued income taxes payable due to the timing of payments. Debt increased by $11.2 million during the three months ended March 31, 1999, to a level of $470.6 million. This increase resulted from a timing issue related to the payment and reimbursement of certain litigation expenses by Georgia Gulf's insurance carriers. Georgia Gulf had approximately $120.0 million of availability under its $350.0 million revolving credit loan as of March 31, 1999. The revolving credit loan is scheduled to mature March 30, 2000. Management does not anticipate any difficulty in refinancing this debt before its maturity date. Capital expenditures for the three months ended March 31, 1999 were down to $4.2 million as compared to $7.6 million for the same 1998 period. Capital expenditures for 1999 will be directed toward certain environmental projects and increased efficiency of existing operations. Georgia Gulf estimates that total capital expenditures for 1999 will approximate $20.0 million. 10 Georgia Gulf declared dividends of $0.08 per share or $2.5 million during the first quarter of 1999. As of March 31, 1999, Georgia Gulf had authorization to repurchase up to 5.5 million shares under the current common stock repurchase program. YEAR 2000 COMPUTER SYSTEMS COMPLIANCE Georgia Gulf has recognized the need to ensure its operations will not be adversely impacted by the Year 2000 date conversion situation common in many data processing systems. All of Georgia Gulf's financial reporting systems have been acquired or developed within the past seven years. The installation of these systems is complete, and testing indicates these systems are Year 2000 compliant. Process control software also controls the operation of many of Georgia Gulf's plants; this process control software was updated to Year 2000 compliant versions during 1998. Georgia Gulf believes its remaining Year 2000 exposure exists primarily in the areas of personal computers and with external partners. The remaining exposure related to the personal computers will be addressed before the end of the first half of 1999. Third parties critical to Georgia Gulf, both suppliers and customers, were contacted during the first quarter of 1999 in order to develop appropriate contingency plans, if necessary. The remaining Year 2000 conversion costs are not expected to be material. FORWARD-LOOKING STATEMENTS This form 10-Q and other communications to stockholders, as well as oral statements made by representatives of Georgia Gulf, may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, Georgia Gulf's outlook for future periods, supply and demand, pricing trends and market forces within the chemical industry, cost reduction strategies and their results, planned capital expenditures, long-term objectives of management and other statements of expectations concerning matters that are not historical facts. Predictions of future results contain a measure of uncertainty and, accordingly, actual results could differ materially due to various factors. Factors that could change forward-looking statements are, among others: - - changes in the general economy; - - changes in demand for Georgia Gulf's products or increases in overall industry capacity that could affect production volumes and/or pricing; - - changes and/or cyclicality in the industries to which Georgia Gulf's products are sold; - - availability and pricing of raw materials; - - technological changes affecting production; - - difficulty in plant operations and product transportation; - - governmental and environmental regulations; and - - other unforseen circumstances. A number of these factors are discussed in this Form 10-Q and in Georgia Gulf's other periodic filings with the Securities and Exchange Commission, including Georgia Gulf's annual report on Form 10-K for the year ended December 31, 1998. 11 Item 3. Quantitative and Qualitative Disclosures About Market Risk. For a discussion of certain market risks related to Georgia Gulf, see Part I, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk", in the Company's Annual Report on Form 10-K for the year ended December 31, 1998. There have been no significant developments with respect to the Company's exposure to market risk except for the change in the fair value of interest rate swaps disclosed in note 4 to the financial statements included herein. 12 PART II. OTHER INFORMATION. Item 1. Legal Proceedings. Georgia Gulf is a party to numerous individual and several class-action lawsuits filed against Georgia Gulf, among other parties, arising out of an incident that occurred in September 1996 in which workers were exposed to a chemical substance on Georgia Gulf's premises in Plaquemine, Louisiana. The substance was later identified to be a form of mustard agent, a chemical which is not manufactured as part of Georgia Gulf's ordinary operations, but instead occurred as a result of an unforeseen chemical reaction. Georgia Gulf presently believes there are approximately 2,000 plaintiffs, of which approximately 650 are workers claiming to have been on-site at the time of the incident. All of the actions claim one or more forms of compensable damages, including past and future wages, past and future physical and emotional pain and suffering, and medical monitoring. The lawsuits were originally filed in Louisiana State Court in Iberville Parish. In September 1998, the plaintiffs filed amended petitions that added the additional allegations that Georgia Gulf had engaged in intentional conduct against the plaintiffs. These additional allegations raised a coverage issue under Georgia Gulf's general liability insurance policies. In December 1998, as required by the terms of the insurance policies, the insurers demanded arbitration to determine whether coverage is required for the alleged intentional conduct in addition to the coverage applicable to the other allegations of the case. The date for the arbitration has not yet been established. As a result of the arbitration relating to the insurance issue, as permitted by federal statute, the insurers removed the cases to United States District Court in December 1998. By order entered March 2, 1999, the federal court denied the plaintiff's motion to remand the cases back to state court and retained federal jurisdiction. Settlements have been reached with a majority of the original workers, including those claimants believed to be the most severely injured, and the settled cases have been or will be dismissed. Additionally, settlements have been reached or are being negotiated with other parties named as defendants whereby such parties have made, or are being requested to make, contributions to the recoveries made by the plaintiffs. Negotiations for the resolution of the remaining claims are continuing. Notwithstanding the foregoing, Georgia Gulf is asserting and pursuing defenses to the claims. Based on the present status of the proceedings, Georgia Gulf believes the liability ultimately imposed will not have a material effect on the financial position or on results of operations of Georgia Gulf. In addition, Georgia Gulf is subject to other claims and legal actions that may arise in the ordinary course of business. Management believes that the ultimate liability, if any, with respect to these other claims and legal actions, will not have a material effect on the financial position or on results of operations of Georgia Gulf. Item 6. Exhibits and Reports on Form 8-K. a) No exhibits are required to be filed as part of this Form 10-Q. b) No reports on Form 8-K were filed with the Securities and Exchange Commission during the first quarter of 1999. 13 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. GEORGIA GULF CORPORATION ------------------------ (Registrant) Date May 13, 1999 /s/ Edward A. Schmitt ------------------------------- ------------------------------ Edward A. Schmitt President and Chief Executive Officer (Principal Executive Officer) Date May 13, 1999 /s/ Richard B. Marchese ------------------------------- ---------------------------- Richard B. Marchese Vice President Finance, Chief Financial Officer and Treasurer (Principal Financial Officer) 14 EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM GEORGIA GULF CORPORATION FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1999. 1,000 U.S. 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 1 1,500 0 99,964 2,400 65,654 174,132 687,721 293,225 685,834 338,978 224,925 0 0 309 28,852 685,834 187,588 187,588 165,932 165,932 0 0 7,323 3,991 1,457 2,534 0 0 0 2,534 .08 .08
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