-----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, P6NStCpqeyMVa9mULohl7jjkRZKHDfPHBtYsZwRE1ykDID0JVFyYyk5P9OSHIeUm W/8hSRYo4nYCyjDjNa9ilw== 0000950132-96-000472.txt : 19960812 0000950132-96-000472.hdr.sgml : 19960812 ACCESSION NUMBER: 0000950132-96-000472 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960809 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALGON CARBON CORPORATION CENTRAL INDEX KEY: 0000812701 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INORGANIC CHEMICALS [2810] IRS NUMBER: 250530110 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10776 FILM NUMBER: 96606741 BUSINESS ADDRESS: STREET 1: P O BOX 717 STREET 2: 400 CALGON CARBON DRIVE CITY: PITTSBURGH STATE: PA ZIP: 15230-0717 BUSINESS PHONE: 4127876700 MAIL ADDRESS: STREET 1: P.O. BOX 717 CITY: PITTSBURGH STATE: PA ZIP: 15230-0717 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) [X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 1996 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 0-15903 CALGON CARBON CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 25-0530110 ------------------------------- ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) P. O. Box 717, Pittsburgh, PA 15230-0717 ----------------------------------------- (Address of principal executive offices) (Zip Code) (412) 787-6700 ---------------------------------------------------- (Registrant's telephone number, including area code) - -------------------------------------------------------------------------------- (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 (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 ______ ----- Applicable only to issuers involved in bankruptcy proceedings during the preceding five years: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes_____ No ______ Applicable only to corporate issuers: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at July 31, 1996 ----------------------------- ---------------------------- Common Stock, $.01 par value 40,429,860 shares CALGON CARBON CORPORATION SEC FORM 10-Q QUARTER ENDED JUNE 30, 1996 I N D E X --------- PART 1 - FINANCIAL INFORMATION - ------ --------------------- Item 1. Financial Statements ------ -------------------- Page ---- Introduction to the Financial Statements . . . . . . . 2 Consolidated Statement of Income and Retained Earnings . . . . . . . . . . . . . . . . . 3 Consolidated Balance Sheet . . . . . . . . . . . . . . 4 Consolidated Statement of Cash Flows . . . . . . . . . 5 Selected Notes to Financial Statements . . . . . . . . 6 Report of Independent Accountants on Review of Unaudited Interim Financial Information. . . . . . . 7 Item 2. Management's Discussion and Analysis of Results ------ ----------------------------------------------- of Operations and Financial Condition . . . . . . . . . . . 8 ------------------------------------- PART II - OTHER INFORMATION - ------- ----------------- Item 4. Submission of Matters to a Vote of Security Holders. . . 11 ------ --------------------------------------------------- Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 11 ------ -------------------------------- SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 - ---------- - 1 - PART I - FINANCIAL INFORMATION ------------------------------ Item 1. Financial Statements - ------- -------------------- INTRODUCTION TO THE FINANCIAL STATEMENTS ---------------------------------------- The consolidated financial statements included herein have been prepared by Calgon Carbon Corporation (the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the Company's consolidated financial statements and the notes included therein for the year ended December 31, 1995. The financial information presented reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management,necessary for a fair statement of the results for the interim periods presented. The results for interim periods are not necessarily indicative of results to be expected for the year. Price Waterhouse LLP has made a review based on procedures adopted by the American Institute of Certified Public Accountants of the unaudited consolidated financial statements included in this filing on Form 10-Q. As stated in its report on page 7, Price Waterhouse LLP did not audit and, accordingly, does not express an opinion on the unaudited consolidated financial statements. Price Waterhouse LLP is not subject to the liability provisions of section 11 of the Securities Act of 1933 for their report on the unaudited consolidated financial statements because their report is not a "report" within the meaning of sections 7 and 11 of the Act. - 2 - CALGON CARBON CORPORATION CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS ------------------------------------------------------ (Dollars in Thousands) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, -------------------- ------------------- 1996 1995 1996 1995 --------- --------- --------- -------- Net sales...................................................................... $ 74,945 $ 75,968 $143,934 $144,777 -------- -------- -------- -------- Cost of products sold (excluding depreciation)...................................................... 47,194 48,076 90,423 92,245 Depreciation................................................................... 4,743 4,632 9,601 9,154 Selling, general and administrative expenses....................................................... 12,087 12,395 23,917 24,434 Research and development expenses...................................................................... 1,653 1,456 3,124 2,780 -------- -------- -------- -------- 65,677 66,559 127,065 128,613 -------- -------- -------- -------- Income from operations......................................................... 9,268 9,409 16,869 16,164 Interest income................................................................ 319 347 646 707 Interest expense............................................................... (154) (200) (328) (412) Other income (expense)--net.................................................... 90 (438) (73) (1,078) -------- -------- -------- -------- Income before income taxes..................................................... 9,523 9,118 17,114 15,381 Provision for income taxes..................................................... 3,438 3,067 6,247 5,411 -------- -------- -------- -------- Net income..................................................................... 6,085 6,051 10,867 9,970 Common stock dividends......................................................... (3,233) (3,031) (6,467) (26,272) Retained earnings, beginning of period..................................................................... 154,883 145,003 153,335 164,325 -------- -------- -------- -------- Retained earnings, end of period........................................................................ $157,735 $148,023 $157,735 $148,023 ======== ======== ======== ======== Net income per common share.................................................... $.15 $.15 $.27 $.25 ======== ======== ======== ======== Weighted average shares outstanding...................................................................40,418,860 40,418,860 40,418,860 40,418,860 ========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements. - 3 - CALGON CARBON CORPORATION CONSOLIDATED BALANCE SHEET -------------------------- (Dollars in Thousands)
June 30, December 31, 1996 1995 --------- ------------- (Unaudited) ASSETS Current assets: Cash and cash equivalents................... $ 33,510 $ 40,089 Receivables................................. 55,179 55,779 Inventories................................. 38,693 43,643 Other current assets........................ 12,803 8,518 -------- -------- Total current assets...................... 140,185 148,029 Property, plant and equipment, net........... 173,277 175,952 Other assets................................. 23,890 14,020 -------- -------- Total assets.............................. $337,352 $338,001 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Long-term debt due within one year.......... $ 3,826 $ 8,514 Accounts payable and accrued liabilities.... 24,149 28,252 Restructuring reserve....................... 8,949 11,616 Payroll and benefits payable................ 11,506 13,546 Accrued income taxes........................ 593 1,517 -------- -------- Total current liabilities................. 49,023 63,445 Long-term debt............................... 15,737 5,608 Deferred income taxes........................ 43,845 41,959 Other liabilities............................ 8,241 8,802 -------- -------- Total liabilities......................... 116,846 119,814 -------- -------- Shareholders' equity: Common shares, $.01 par value, 100,000,000 shares authorized, 41,424,960 shares issued.............................. 414 414 Additional paid-in capital.................. 61,986 61,986 Retained earnings........................... 157,735 153,335 Cumulative translation adjustments.......... 12,699 14,780 -------- -------- 232,834 230,515 Treasury stock, at cost, 1,006,100 shares... (12,328) (12,328) -------- -------- Total shareholders' equity................ 220,506 218,187 -------- -------- Total liabilities and shareholders' equity..................... $337,352 $338,001 ======== ========
The accompanying notes are an integral part of these financial statements. - 4 - CALGON CARBON CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS ------------------------------------ Increase (decrease) in Cash and Cash Equivalents (Dollars in Thousands) (Unaudited)
Six Months Ended June 30, ------------------ 1996 1995 ------- -------- Cash flows from operating activities - ------------------------------------ Net income........................................ $10,867 $ 9,970 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization................... 9,692 9,220 Employee benefit plan provisions................ 266 386 Changes in assets and liabilities - net of exchange: (Increase) decrease in receivables............ 1,292 (997) (Increase) decrease in inventories............ 4,866 (6,692) (Increase) in other current assets............ (3,615) (1,553) (Decrease) in restructuring reserve........... (2,055) (3,673) Increase (decrease) in accounts payable and accruals................................. (7,306) 3,505 Increase in long-term deferred income taxes (net)........................... 5,215 5,230 Other items--net................................ (1,080) (921) ------- -------- Net cash provided by operating activities.......................... 18,142 14,475 ------- -------- Cash flows from investing activities - ------------------------------------ Purchase of businesses.......................... (18,544) - Property, plant and equipment expenditures...... (5,562) (4,777) Proceeds from disposals of equipment............ 209 172 ------- -------- Net cash (used in) investing activities....... (23,897) (4,605) ------- -------- Cash flows from financing activities - ------------------------------------ Net proceeds from borrowings.................... 6,005 1,673 Common stock dividends.......................... (6,467) (26,272) ------- -------- Net cash (used in) financing activities......................... (462) (24,599) ------- -------- Effect of exchange rate changes on cash........... (362) 197 ------- -------- (Decrease) in cash and cash equivalents........... (6,579) (14,532) Cash and cash equivalents, beginning of period........................................ 40,089 45,376 ------ ------ Cash and cash equivalents, end of period.......... $33,510 $30,844 ======= =======
The accompanying notes are an integral part of these financial statements. - 5 - CALGON CARBON CORPORATION SELECTED NOTES TO FINANCIAL STATEMENTS -------------------------------------- (Dollars in Thousands) (Unaudited) 1. Inventories:
June 30, 1996 December 31, 1995 ---------------- ----------------- Raw materials $ 11,034 $ 13,960 Finished goods 27,659 29,683 -------- -------- $ 38,693 $ 43,643 ======== ======== 2. Supplemental Cash Flow Information: Six Months Ended June 30, ------------------------------ 1996 1995 -------- -------- Cash paid during the period for: Interest $ 338 $ 512 Income taxes (refunds) net $ 2,730 $ (31) -------- -------- Bank debt: Borrowings $ 18,908 $ 21,611 Repayments (12,903) (19,938) -------- -------- Net proceeds from borrowings $ 6,005 $ 1,673 ======== ========
3. Common stock dividends declared during the six months ended June 30, 1996 were $.16 per common share. Common stock dividends declared during the six months ended June 30, 1995 were $.65 per common share. This consisted of a special dividend of $.50 per common share and normal dividends of $.15 per common share. 4. Restructuring Reserve: The Company recorded restructuring charges in 1994 and 1993. (Details of such charges are shown in the "Restructuring Charges" note to the 1995 financial statements in the annual report). Activity and adjustments to the Restructuring Reserve for the period January 1 through June 30, 1996 are as follows:
Currency Balance Translation Balance Jan. 1, 1996 Payments Adjustments June 30, 1996 ------------ ------------- ----------- ------------- Employee separations $ 1,900 $( 734) $ (90) $1,076 Demolition, disposition, site protection and environ- mental costs 9,716 ( 1,321) (522) 7,873 ------- -------- ----- ------ Total $11,616 $( 2,055) $(612) $8,949 ======= ======== ===== ======
- 6 - REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Calgon Carbon Corporation We have reviewed the consolidated balance sheet of Calgon Carbon Corporation and its subsidiaries as of June 30, 1996 and the related consolidated statements of income and retained earnings and of cash flows for the three- month and six-month periods ended June 30, 1996 and 1995. This financial information is the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical review procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with generally accepted accounting principles. We previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1995, and the related consolidated statements of income, shareholders' equity and cash flows for the year then ended (not presented herein), and in our report dated February 13, 1996, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the accompanying consolidated balance sheet information as of December 31, 1995 is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. PRICE WATERHOUSE LLP Pittsburgh, PA August 9, 1996 - 7 - Item 2. Management's Discussion and Analysis of Results of ------ -------------------------------------------------- Operations and Financial Condition ---------------------------------- This discussion should be read in connection with the information contained in the Consolidated Financial Statements and Selected Notes to Financial Statements. Results of Operations --------------------- Consolidated net sales for the three months ended June 30, 1996 decreased by $1.0 million or 1.3% and consolidated net sales for the six- month period then ended decreased by $.8 million or .6%. Net sales to the industrial process markets of $33.9 million and $67.9 million for the three and six month periods ended June 30, 1996 were below the comparable 1995 periods by $2.2 million or 6.1% and $2.8 million or 3.9%. The decreases for both periods were primarily caused by declines in the European chemical category due to the cessation of production at the Brilon-Wald, Germany plant, which was closed in 1995, and to declines in the United States cigarette and Asia-Pacific energy areas. Net sales to the environmental markets for the three and six-month periods ended June 30, 1996 were $31.9 million and $63.0 million, respectively, representing increases of $.2 million or .7% and $1.2 million or 1.9% over comparable 1995 periods. The increases for both the quarter and six months resulted from improvements in the United States municipal category combined with revenues from the recently acquired perox-pure/TM/ business operations of Vulcan Peroxidation Systems Inc. These increases were partially offset by decreases in the European municipal category. The consumer area reported sales for the quarter of $9.1 million, which resulted in an increase of $1.0 million or 11.9%, and $13.0 million for the six months ended June 30, 1996 resulting in an increase of $.7 million or 6.1%. Both increases were due to improved barbecuing weather conditions in Germany. The strengthening of the U.S. dollar relative to the European currencies reduced sales revenues by $2.1 million in the quarter. Gross profit, before depreciation, as a percentage of net sales for the three and six-month periods ended June 30, 1996 were 37.0% and 37.2%, respectively. These rates compare to 36.7% and 36.3% for the comparable 1995 periods, respectively. Both periods experienced slight increases due to the net effect of improved pricing partially offset by higher natural gas costs and higher-than-normal manufacturing costs for coconut-based products. Depreciation expense for the three months ended June 30, 1996 and for the six-month period then ended increased by $.1 million and $.4 million versus the three and six months ended June 30, 1995, respectively, due to normal, ongoing capital spending. Selling, general and administrative and research and development expenses for the three and six months ended June 30, 1996 were $13.7 million and $27.0 million, respectively, and were slightly reduced from 1995. - 8 - Other income (expense) -- net for the three and six months ended June 30, 1996 were favorable versus the comparable periods ended June 30, 1995 by $.5 million and $1.0 million due primarily to net foreign exchange transaction gains in 1996 versus losses in 1995. The effective tax rates for the three and six months ended June 30, 1996 were 36.1% and 36.5%, respectively. These rates represented increases versus the three and six-month periods ended June 30, 1995 of 2.5% and 1.3%, respectively, due primarily to increases in foreign taxes in excess of the United States statutory rate. Financial Condition ------------------- Working Capital and Liquidity ----------------------------- Historically, the Company has been a net generator of cash, providing sufficient funds on an annual basis for its debt service, working capital, capital expenditures and dividend requirements. The Company expects to continue to generate significant cash from operations in the future. During the quarter ended June 30, 1996, the Company obtained a Canadian dollar term loan from a Canadian bank in the amount of $10.3 million, which is payable in July 2001. This borrowing was used to finance the Canadian acquisition, which is discussed later in this report. The Company also has two United States credit facilities of $10 million each, expiring in April 1997 and May 1997 and a German credit facility in the amount of $16.4 million with a duration of "until further notice". Based upon its present financial position and history of operations, it is believed that these credit facilities and cash flow from operations will provide sufficient liquidity to cover debt service and future working capital, capital expenditure and dividend requirements. Net cash provided by operating activities was $18.1 million for the six-month period ended June 30, 1996. This represented an increase of $3.7 million from the six-month period ended June 30, 1995. This increase was the result of increased net income and reduced accounts receivable and inventory in the current period, partially offset by a decrease in accounts payable and accruals in the current period. Restructuring of Operations --------------------------- The Company continued to execute its plan to dismantle the Brilon-Wald plant in Germany and to pay liabilities recognized as of December 31, 1994. The plant was closed and employees were separated in 1995. The demolition of the plant and cash outlays from internally generated funds are expected to be completed substantially in 1996. Evaluations of demolition, disposition, site protection and environmental costs continue and the existing reserves are believed to be adequate. Capital Expenditures and Investments ------------------------------------ Capital expenditures for property, plant and equipment totaled $5.6 million for the six months ended June 30, 1996 compared to expenditures of $4.8 million for the same period in 1995. The major portion of the 1996 expenditures was for - 9 - continuing improvements to a production line at the Big Sandy, Kentucky plant ($1.1 million) and domestic service customer capital ($1.9 million). Capital expenditures for the year 1996 are currently projected to be approximately $15 million. On February 20, 1996, the Company completed the acquisition of the perox- pure/TM/ business operations of Vulcan Peroxidation Systems Inc. The purchase price was $7.6 million. On June 3, 1996, the Company purchased all the outstanding common stock of Solarchem Enterprises Inc. of Markham, Ontario. The purchase price was $10.9 million. Because these transactions were not material to the consolidated financial position or results of operations of the Company, no pro-forma information has been included in this report. - 10 - PART II - OTHER INFORMATION --------------------------- Item 4. Submission of Matters to a Vote of Security Holders ------- --------------------------------------------------- The annual meeting of stockholders was held April 23, 1996. In connection with the meeting, proxies were solicited pursuant to the Securities Exchange Act. The following are the voting results on proposals considered and voted upon at the meeting, all of which were described in the proxy statement. 1. All nominees for director listed in the proxy statement were elected.
Votes For Votes Withheld ---------- -------------- Nick H. Prater 35,920,333 234,660 Seth E. Schofield 35,999,527 155,466 Harry H. Weil 35,646,204 508,789 Robert L. Yohe 36,011,533 143,460
The following directors continued in office after the meeting: Class of 1997 ------------- Colin Bailey Ronald R. Tisch Roger H. Zanitsch Class of 1998 ------------- Robert W. Cruickshank Arthur L. Goeschel Thomas A. McConomy 2. Price Waterhouse LLP was elected as the independent accountants for 1996. (For - 36,081,630; Against - 33,127; Abstained - 40,236). Item 6. Exhibits and Reports on Form 8-K ------- -------------------------------- (a) Exhibits 15 Letter from Price Waterhouse LLP regarding unaudited interim financial information. (b) Reports on Form 8-K There were no reports on Form 8-K filed for the quarter ended June 30, 1996. - 11 - 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. CALGON CARBON CORPORATION ------------------------- (REGISTRANT) Date: August 9, 1996 By /s/R. Scott Keefer -------------------------------- R. Scott Keefer Sr. Vice President-Finance, Chief Financial Officer - 12 - EX-15 2 PRICE WATERHOUSE LETTER Exhibit No. 15 August 9, 1996 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Dear Ladies and Gentlemen: We are aware that Calgon Carbon Corporation has included our report dated August 9, 1996 (issued pursuant to the provisions of Statement on Auditing Standards No. 71) in the Prospectuses constituting part of its Registration Statements on Forms S-8 (No. 33-34019 and No. 333-01019). We are also aware of our responsibilities under the Securities Act of 1933. Yours very truly, Price Waterhouse LLP EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-31-1995 JAN-01-1996 JUN-30-1996 33,510 0 55,179 0 38,693 140,185 301,591 128,314 337,352 49,023 0 0 0 50,072 170,434 337,352 143,934 143,934 90,423 127,065 73 0 328 17,114 6,247 10,867 0 0 0 10,867 .27 .27
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