-----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, IjGEPMLctJ4fr4QznBs6tcSUW1SqzOYqw1RpKGxAVwLKFDKCMQuB3kBt6J4w8e57 E4X+PkXdbEXQUmLQZ9wG5A== 0000891092-03-002110.txt : 20030813 0000891092-03-002110.hdr.sgml : 20030813 20030813110658 ACCESSION NUMBER: 0000891092-03-002110 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMCOL INTERNATIONAL CORP CENTRAL INDEX KEY: 0000813621 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 360724340 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-14447 FILM NUMBER: 03839480 BUSINESS ADDRESS: STREET 1: 1500 W SHURE DR CITY: ARLINGTON HEIGHTS STATE: IL ZIP: 60004-7803 BUSINESS PHONE: 8473948730 MAIL ADDRESS: STREET 1: 1500 W SHURE DR CITY: ARLINGTON HEIGHTS STATE: IL ZIP: 60004-7803 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN COLLOID CO DATE OF NAME CHANGE: 19920703 10-Q 1 e15461_10q.txt 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, 2003 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 0-15661 ---------------------------------------------------------- AMCOL INTERNATIONAL CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 36-0724340 - ------------------------------- ---------------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1500 West Shure Drive, Suite 500, Arlington Heights, Illinois 60004-7803 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (847) 394-8730 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) 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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12(b)-2 of the Exchange Act). Yes |X| No |_| Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at July 22, 2003 - ------------------------------- --------------------------------- (Common stock, $.01 par value) 28,348,969 Shares AMCOL INTERNATIONAL CORPORATION INDEX Page No. -------- Part I - Financial Information Item 1 Financial Statements Condensed Consolidated Balance Sheets - June 30, 2003 and December 31, 2002 1 Condensed Consolidated Statements of Operations - three and six months ended June 30, 2003 and 2002 2 Condensed Consolidated Statements of Comprehensive Income - three and six months ended June 30, 2003 and 2002 2 Condensed Consolidated Statements of Cash Flows - six months ended June 30, 2003 and 2002 3 Notes to Condensed Consolidated Financial Statements 4 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3 Quantitative and Qualitative Disclosures About Market Risk 16 Item 4 Controls and Procedures 16 Part II - Other Information Item 4 Submission of Matters to a Vote of Security Holders 17 Item 6 Exhibits and Reports on Form 8-K 17 AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) - -------------------------------------------------------------------------------- ASSETS June 30, December 31, 2003 2002 (unaudited) * - -------------------------------------------------------------------------------- Current assets: Cash $ 13,110 $ 15,597 Accounts receivable, net 64,008 48,870 Inventories 38,227 38,854 Prepaid expenses 5,833 4,270 Current deferred tax assets 2,829 2,825 Income taxes receivable 1,628 717 -------- -------- Total current assets 125,635 111,133 -------- -------- Investments in and advances to joint ventures 12,841 12,419 -------- -------- Property, plant, equipment, and mineral rights and reserves: Land and mineral rights and reserves 9,582 9,543 Depreciable assets 210,121 203,334 -------- -------- 219,703 212,877 Less: accumulated depreciation 139,622 131,030 -------- -------- 80,081 81,847 -------- -------- Other assets: Goodwill and other Intangible assets, net 5,216 5,202 Long-term prepayments and other assets 9,505 8,558 Deferred tax assets 2,633 2,669 -------- -------- 17,354 16,429 -------- -------- $235,911 $221,828 ======== ======== - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY June 30, December 31, 2003 2002 (unaudited) * - -------------------------------------------------------------------------------- Current liabilities: Current maturities of long-term debt $ 16,600 $ 12,600 Accounts payable 15,569 17,918 Accrued liabilities 25,823 22,121 -------- -------- Total current liabilities 57,992 52,639 -------- -------- Long-term debt 5,616 5,573 -------- -------- Minority interests in subsidiaries 612 615 Other liabilities 11,858 11,618 -------- -------- 12,470 12,233 -------- -------- Stockholders' equity: Common stock 320 320 Additional paid in capital 67,349 69,850 Retained earnings 107,994 101,322 Accumulated other comprehensive income 4,291 2,005 -------- -------- 179,954 173,497 Less: Treasury stock 20,121 22,114 -------- -------- 159,833 151,383 -------- -------- $235,911 $221,828 ======== ======== - -------------------------------------------------------------------------------- * Condensed from audited financial statements. The accompanying notes are an integral part of these condensed consolidated financial statements. 1 AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except share and per share amounts)
- ------------------------------------------------------------------------------------------------------------------- Six Months Ended Three Months Ended June 30, June 30, ------------------------------------------------------------- 2003 2002 2003 2002 - ------------------------------------------------------------------------------------------------------------------- Net sales $ 172,720 $ 135,876 $ 93,253 $ 78,535 Cost of sales 130,900 103,955 70,057 59,267 ------------ ------------ ------------ ------------ Gross profit 41,820 31,921 23,196 19,268 General, selling and administrative expenses 29,223 25,143 14,929 13,113 ------------ ------------ ------------ ------------ Operating profit 12,597 6,778 8,267 6,155 ------------ ------------ ------------ ------------ Other income (expense): Interest expense, net (202) (240) (122) (148) Other, net 162 (77) 130 (47) ------------ ------------ ------------ ------------ (40) (317) 8 (195) ------------ ------------ ------------ ------------ Income before income taxes and equity 12,557 6,461 8,275 5,960 in income of joint ventures Income tax expense 4,269 2,325 2,814 2,149 ------------ ------------ ------------ ------------ Income before equity in income of 8,288 4,136 5,461 3,811 joint ventures Income from joint ventures 347 447 252 243 Minority interest in net loss (income) of subsidiary 2 11 (6) 8 ------------ ------------ ------------ ------------ Net income $ 8,637 $ 4,594 $ 5,707 $ 4,062 ============ ============ ============ ============ Weighted average common shares outstanding 28,051,675 28,416,239 28,108,456 28,378,373 ============ ============ ============ ============ Weighted average common and common equivalent shares outstanding 29,745,805 30,688,126 29,896,941 30,559,763 ============ ============ ============ ============ Basic earnings per share $ 0.30 $ 0.16 $ 0.20 $ 0.14 ============ ============ ============ ============ Diluted earnings per share $ 0.29 $ 0.15 $ 0.19 $ 0.13 ============ ============ ============ ============ Dividends declared per share $ 0.070 $ 0.035 $ 0.040 $ 0.020 ============ ============ ============ ============ - -------------------------------------------------------------------------------------------------------------------
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In thousands)
- ------------------------------------------------------------------------------------------------------------------- Six Months Ended Three Months Ended June 30, June 30, 2003 2002 2003 2002 Net income $ 8,637 $ 4,594 $ 5,707 $ 4,062 Other comprehensive income: Foreign currency translation adjustment 2,286 2,930 3,832 3,314 ------------ ------------ ------------ ------------ Comprehensive income $ 10,923 $ 7,524 $ 9,539 $ 7,376 ============ ============ ============ ============ - -------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these condensed consolidated financial statements. 2 AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
- -------------------------------------------------------------------------------------------------- Six Months Ended June 30, 2003 2002 -------------------------- Cash flow from operating activities: Net income $ 8,637 $ 4,594 Adjustments to reconcile from net income to net cash provided by (used in) operating activities: Depreciation, depletion, and amortization 8,756 8,801 Changes in assets and liabilities, net of effects of acquisitions: Increase in current assets (17,221) (8,770) Decrease in noncurrent assets 35 165 (Decrease) increase in current liabilities 1,353 (639) Increase in noncurrent liabilities 240 1,264 Other (153) 815 -------- -------- Net cash provided by operating activities 1,647 6,230 -------- -------- Cash flow from investing activities: Acquisition of land, mineral reserves, and depreciable assets (6,323) (7,342) Acquisitions -- (16,805) Other (978) (4,276) -------- -------- Net cash used in investing activities (7,301) (28,423) -------- -------- Cash flow from financing activities: Net change in outstanding debt 4,043 21,851 Proceeds from sales of treasury stock 1,085 1,140 Purchases of treasury stock (1,593) (4,015) Dividends paid (1,965) (994) -------- -------- Net cash provided by financing activities 1,570 17,982 -------- -------- Effect of foreign currency rate changes on cash 1,597 1,596 -------- -------- Net decrease in cash and cash equivalents (2,487) (2,615) -------- -------- Cash and cash equivalents at beginning of period 15,597 10,320 -------- -------- Cash and cash equivalents at end of period $ 13,110 $ 7,705 ======== ======== Supplemental disclosures of cash flow information: Cash paid for: Interest $ 252 $ 210 ======== ======== Income taxes $ 2,180 $ 702 ======== ======== - --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these condensed consolidated financial statements. 3 AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) Note 1: BASIS OF PRESENTATION The financial information included herein, other than the condensed consolidated balance sheet as of December 31, 2002, has been prepared by management and is unaudited. The condensed consolidated balance sheet as of December 31, 2002, has been derived from, but does not include all the disclosures contained in, the audited consolidated financial statements for the year ended December 31, 2002. The information furnished herein includes all adjustments which are, in the opinion of management, necessary for a fair statement of the results of operations and cash flows for the interim periods ended June 30, 2003 and 2002, and the financial position of the Company as of June 30, 2003, and all such adjustments are of a normal recurring nature. Management recommends the accompanying condensed consolidated financial information be read in conjunction with the consolidated financial statements and related notes included in the Company's 2002 Annual Report on Form 10-K which accompanies the 2002 Corporate Report. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full years. In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143") which addresses financial accounting and reporting for legal obligations associated with the retirement of tangible long-lived assets and the related asset retirement costs. SFAS 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each period to reflect the passage of time and changes in the estimated future cash flows underlying the obligation. The Company adopted SFAS No. 143 as of January 1, 2003, and determined that no material adjustments were necessary. At June 30, 2003 the Company's recorded reclamation obligation was $5,834. During the quarter ended June 30, 2003, the obligation was reduced by $101 due to payments made in relation to normal mining activities offset by accretion and recognition of additional obligations resulting from normal mining activities. Note 2: INVENTORIES Inventories at June 30, 2003 have been valued using the same methods as at December 31, 2002. The composition of inventories at June 30, 2003 and December 31, 2002, was as follows: - -------------------------------------------------------------------------------- June 30, December 31, 2003 2003 - -------------------------------------------------------------------------------- Advance mining $ 3,008 $ 2,836 Crude stockpile inventories 12,120 11,330 In-process inventories 11,850 15,142 Other raw material, container, and supplies inventories 11,249 9,546 ------- ------- $38,227 $38,854 ======= ======= - -------------------------------------------------------------------------------- 4 AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) (Continued) Note 3: EARNINGS PER SHARE Basic earnings per share were computed by dividing net income by the weighted average number of common shares outstanding during each period. Diluted earnings per share were computed by dividing net income by the weighted average common shares outstanding after consideration of the dilutive effect of stock options outstanding during each period.
- -------------------------------------------------------------------------------------------------- Six Months Ended Three Months Ended June 30, June 30, ------------------------------------------------ 2003 2002 2003 2002 - -------------------------------------------------------------------------------------------------- Weighted average of common shares outstanding 28,051,675 28,416,239 28,108,456 28,378,373 Dilutive impact of stock options 1,694,130 2,271,887 1,788,485 2,181,390 ---------- ---------- ---------- ---------- Weighted average of common and common equivalent shares for the period 29,745,805 30,688,126 29,896,941 30,559,763 ========== ========== ========== ========== Common shares outstanding at end of period 28,262,630 28,220,874 28,262,630 28,220,874 ========== ========== ========== ========== - --------------------------------------------------------------------------------------------------
Note 4: BUSINESS SEGMENT INFORMATION The Company operates in two major industry segments: minerals and environmental. The Company also operates a transportation business. The minerals segment mines, processes and distributes clays and products with similar applications to various industrial and consumer markets. The environmental segment processes and distributes clays and products with similar applications for use as a moisture barrier in commercial construction, landfill liners and in a variety of other industrial and commercial applications. The transportation segment includes a long-haul trucking business and a freight brokerage business, which provide services to both the Company's plants and outside customers. The Company identifies segments based on management responsibility and the nature of the business activities of each component of the Company. Intersegment sales are insignificant, other than intersegment shipping, which is disclosed in the following table. The Company measures segment performance based on operating profit. Operating profit is defined as sales less cost of sales and general, selling and administrative expenses related to a segment's operations. The costs deducted to arrive at operating profit do not include interest or income taxes. Segment assets are those assets used in the Company's operations in that segment. Corporate assets include cash and cash equivalents, corporate leasehold improvements, the nanocomposite plant investment and other miscellaneous equipment. 5 AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except share and per share amounts) (Continued) The following summaries set forth certain financial information by business segment for the three and six months ended June 30, 2003 and 2002 and as of June 30, 2003 and December 31, 2002. - -------------------------------------------------------------------------------- Six Months Ended Three Months Ended June 30, June 30, ---------------------------------------------------- 2003 2002 2003 2002 - -------------------------------------------------------------------------------- Business Segment: Revenues: Minerals $ 103,719 $ 78,828 $ 53,542 $ 45,138 Environmental 57,402 46,519 33,913 28,026 Transportation 18,187 15,462 9,390 8,078 Intersegment shipping (6,588) (4,933) (3,592) (2,707) --------- --------- -------- -------- Total $ 172,720 $ 135,876 $ 93,253 $ 78,535 ========= ========= ======== ======== Operating profit (loss): Minerals $ 10,799 $ 6,521 $ 5,882 $ 4,304 Environmental 7,704 5,521 5,321 4,582 Transportation 775 455 399 229 Corporate (6,681) (5,719) (3,335) (2,960) --------- --------- -------- -------- Total $ 12,597 $ 6,778 $ 8,267 $ 6,155 ========= ========= ======== ======== June 30, 2003 Dec. 31, 2002 ============= ============= Assets: Minerals $ 131,105 $ 128,566 Environmental 75,015 65,783 Transportation 2,288 1,895 Corporate 27,503 25,584 --------- --------- Total $ 235,911 $ 221,828 ========= ========= - -------------------------------------------------------------------------------- All of the Company's goodwill at June 30, 2003 and December 31, 2002 was associated with the minerals segment. Note 5: STOCK OPTION PLANS Prior to 2003, the Company accounted for its fixed plan stock options under the recognition and measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations. No stock-based employee compensation cost was reflected in net income for the six months ended June 30, 2002, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. Effective January 1, 2003, the Company adopted the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, and has elected to apply these provisions prospectively to all employee awards granted, modified, or settled after January 1, 2003. Awards under the Company's plans vest over three years. Therefore, the cost related to stock-based employee compensation included in the determination of net income for 2003 and 2004 will be less than that which would have been recognized 6 AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except per share amounts) (Continued) if the fair value based method had been applied to all awards since the original effective date of Statement No. 123. Results for prior years have not been restated. The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all outstanding and unvested awards in each period.
- ------------------------------------------------------------------------------------------------------ Six Months Ended Three Months Ended June 30, June 30, ------------------------------------------------ 2003 2002 2003 2002 - ------------------------------------------------------------------------------------------------------ Net income, as reported $ 8,637 $ 4,594 $ 5,707 $ 4,062 Add: Stock-based employee compensation expense included in reported net income, net of related tax effects 132 -- 66 -- Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects (414) (390) (207) (195) --------- --------- --------- --------- Pro forma net income $ 8,355 $ 4,204 $ 5,566 $ 3,867 ========= ========= ========= ========= Earnings per share: Basic - as reported $ 0.30 $ 0.16 $ 0.20 $ 0.14 Basic - pro forma $ 0.30 $ 0.15 $ 0.20 $ 0.14 Diluted - as reported $ 0.29 $ 0.15 $ 0.19 $ 0.13 Diluted - pro forma $ 0.28 $ 0.14 $ 0.19 $ 0.13 - ------------------------------------------------------------------------------------------------------
Note 6: ACQUISITIONS On May 1, 2002, the Company acquired all of the outstanding stock of Colin Stewart Minchem Limited (CSM), a specialty minerals and chemical Company located in the United Kingdom, in exchange for cash. The aggregate purchase price was $15,507. The purchase was financed utilizing the Company's revolving credit facility. CSM supplies intermediate products, industrial minerals, inorganic chemicals, and additives to customers operating in the laundry detergent, packaging, oil exploration and water treatment markets. The acquisition of CSM provides an additional platform for the Company to expand its global operations and presence. The results of CSM's operations have been included in the condensed consolidated financial statements from the acquisition date. 7 AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In thousands, except per share amounts) (Continued) The following tables summarize the estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition and unaudited pro forma results of operations as if the acquisition of CSM had occurred on January 1, 2002. The unaudited pro forma information is not necessarily indicative of the combined results that would have occurred had the acquisition taken place on January 1, 2002, nor is it necessarily indicative of future results. - -------------------------------------------------------------------------------- At May 1, 2002 - -------------------------------------------------------------------------------- Current assets $ 6,263 Fixed assets 10,520 Goodwill 4,172 ------- Total assets acquired $20,955 ------- Current liabilities $ 3,023 Other liabilities 2,425 ------- Total liabilities assumed $ 5,448 ======= Net assets acquired $15,507 ======= - --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------ Actual Pro Forma Actual Pro Forma Six Months Ended Six Months Ended Three Months Ended Three Months Ended June 30, June 30, June 30, June 30, ----------------------------------------------------------------------------- 2003 2002 2003 2002 - ------------------------------------------------------------------------------------------------------ Net sales $ 172,720 $ 146,535 $ 93,253 $ 81,200 Net income 8,637 5,309 5,707 4,241 Basic earnings per share 0.30 0.19 0.20 0.15 Diluted earnings per share 0.29 0.18 0.19 0.14 - ------------------------------------------------------------------------------------------------------
Note 7: DERIVATIVES From time to time, the Company uses financial derivatives, principally swaps, forward contracts and options, in its management of foreign currency and interest rate exposures. These contracts hedge transactions and balances for periods consistent with committed exposures. The Company uses variable rate credit facilities to finance its operations. These debt obligations expose the Company to variability in interest payments due to changes in interest rates. If interest rates increase, interest expense increases. Conversely, if interest rates decrease, interest expense also decreases. At June 30, 2003, and for the six months then ended, the Company had no derivative instruments outstanding. 8 Item 2: AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Three Months Ended June 30, 2003 vs. 2002 Net sales for the second quarter of 2003 were $93.3 million which was an increase of $14.7 million, or 19% over the same period in 2002. The Company's minerals segment accounted for 57% of net sales and 57% of the increase over the second quarter of 2002. Environmental segment sales represented 36% of net sales for the quarter and 40% of the increase. Transportation segment sales accounted for 7% of the total, after eliminating intersegment sales, and 3% of the increase over the second quarter of 2002. Gross profit was $23.2 million compared with $19.3 million in the prior year quarter. Gross margin improved to 24.9% from 24.5% in the comparable period in 2002. The improvement in margins followed the increase in net sales and lower unit production costs in certain minerals segment businesses. General, selling and administrative expenses totaled $14.9 million in the quarter compared with $13.1 million in the prior year, an increase of 14%. Higher pension, insurance and compensation costs contributed approximately 40% of the increase. Selling and administrative expenses associated with Colin Stewart Minchem, which is part of the minerals segment and was owned for two months in the 2002 second quarter, also accounted for approximately 40% of the increase. Operating profit for the period was $8.3 million compared with $6.2 million in the prior year. The increase followed the improvement in gross profit that was generated by higher net sales. Interest expense was $122 thousand in the quarter compared with $148 thousand in the prior year. The decrease was due to higher average debt levels in the prior year quarter due to the acquisition of Colin Stewart Minchem (CSM) during that period. Additionally, borrowing rates were lower in the second quarter of 2003 compared with the prior year quarter. The Company's borrowing rates are primarily based on the three-month LIBOR which have decreased relative to last year. The effective income tax rate for the quarter was 34% compared with 36% in the prior year. Lower tax rates on foreign-sourced income were the reason for the decrease. Income from minority interests and joint ventures was $0.2 million in both reporting periods. Net income was $5.7 million in the second quarter of 2003 compared with $4.1 million in the prior year period. The increase was the result of the improvement in sales and operating profit described above. Diluted earnings per share totaled $0.19 per share compared to $0.13 per share in the 2002 quarter. Weighted average common and common equivalent shares outstanding decreased by approximately 2% from the prior year period to 29.9 million. The decrease is the result of stock repurchases executed by the Company over the last twelve months. 9 Segment Analysis
- --------------------------------------------------------------------------------------------- Minerals Three Months Ended June 30, ---------------------------------------------------------------- 2003 2002 2003 vs. 2002 ---------------------------------------------------------------- (Dollars in Thousands) - --------------------------------------------------------------------------------------------- Product sales $47,842 89.4% $40,741 90.3% Shipping revenue 5,700 10.6% 4,397 9.7% ------- ---- ------- ---- Net sales 53,542 100.0% 45,138 100.0% 8,404 18.6% Cost of sales - product 37,345 69.7% 32,314 71.6% Cost of sales - shipping 5,700 10.6% 4,397 9.7% ------- ---- ------- ---- Cost of sales 43,045 80.3% 36,711 81.3% ------- ---- ------- ---- Gross profit 10,497 19.7% 8,427 18.7% 2,070 24.6% General, selling and 4,615 8.6% 4,123 9.1% 492 11.9% ------- ---- ------- ---- ----- administrative expenses Operating profit 5,882 11.1% 4,304 9.6% 1,578 36.7% - ---------------------------------------------------------------------------------------------
Approximately 55% of the $8.4 million increase in minerals net sales in the second quarter was contributed by CSM which was owned for two months in the 2002 second quarter. The domestic minerals business units contributed approximately 30% of the increase. Sales volume in the domestic metalcasting and oil well businesses increased over the prior year quarter. Pricing was comparable to 2002 second quarter levels in the domestic minerals businesses. The segment's Asian-based mineral's businesses contributed the remainder of the sales increase. Gross profit earned on domestic minerals sales accounted for approximately 60% of the increase over the second quarter of 2002. Lower production costs associated with the pet products business contributed to the improvement in domestic gross profit. Approximately 24% of the increase in gross profit was attributed to the segment's Asian-based businesses. The remainder of the improvement in gross profit was attributed to CSM. Approximately 65% of the increase in general, selling and administrative expenses was attributed to CSM. Increases in pension and employee benefit costs for domestic personnel contributed most of the remaining increase.
- ------------------------------------------------------------------------------------------------ Environmental Three Months Ended June 30, ----------------------------------------------------------------- 2003 2002 2003 vs. 2002 ----------------------------------------------------------------- (Dollars in Thousands) - ------------------------------------------------------------------------------------------------ Product sales $31,270 92.2% $26,139 93.3% Shipping revenue 2,643 7.8% 1,887 6.7% ------- ----- ------- ----- Net sales 33,913 100.0% 28,026 100.0% 5,887 21.0% ------- ----- ------- ----- Cost of sales - product 19,596 57.8% 16,117 57.5% Cost of sales - shipping 2,643 7.8% 1,887 6.7% ------- ----- ------- ----- Cost of sales 22,239 65.6% 18,004 64.2% ------- ----- ------- ----- Gross profit 11,674 34.4% 10,022 35.8% 1,652 16.5% General, selling and administrative expenses 6,353 18.8% 5,440 19.4% 913 16.8% ------- ----- ------- ----- ----- Operating profit 5,321 15.6% 4,582 16.4% 739 16.1% - ------------------------------------------------------------------------------------------------
Lining technologies accounted for approximately 65% of the increase in sales. Both domestic and international shipments contributed to the higher lining technology sales. Building materials accounted for approximately 35% of the increase in sales. The increase was primarily led by higher shipments in Europe. 10 The 17% increase in gross profit over the 2002 second quarter corresponds with the increase in sales. Gross margin declined by 140 basis points from the second quarter of 2002. This was primarily due to the higher proportion of shipping revenue generated by lining technology export shipments. No profit is earned on shipping revenue. Lower gross margins were also realized on European offshore revenues. Higher professional fees were the primary component of the increase in general, selling and administrative expenses. Compensation expenses also increased over the second quarter of 2002.
- ------------------------------------------------------------------------------------------- Transportation Three Months Ended June 30, -------------------------------------------------------------- 2003 2002 2003 vs. 2002 -------------------------------------------------------------- (Dollars in Thousands) - ------------------------------------------------------------------------------------------- Net sales $9,390 100.0% $8,078 100.0% $1,312 16.2% Cost of sales 8,365 89.1% 7,259 89.9% ------ ----- ------ ----- Gross profit 1,025 10.9% 819 10.1% 206 25.2% General, selling and administrative expenses 626 6.7% 590 7.3% 36 6.1% ------ ----- ------ ----- ------ Operating profit 399 4.2% 229 2.8% 170 74.2% - -------------------------------------------------------------------------------------------
Intersegment sales contributed approximately two-thirds of the sales increase. Higher traffic levels and new customer sales accounted for the remainder of the increase over the 2002 second quarter. Gross margins increased 80 basis points due to higher equipment utilization rates and better sales pricing. General, selling and administrative expenses increased due to higher personnel costs.
- ------------------------------------------------------------------------------------- Corporate Three Months Ended June 30, ---------------------------------------------------- 2003 2002 2003 vs. 2002 ---------------------------------------------------- (Dollars in Thousands) - ------------------------------------------------------------------------------------- Intersegment shipping sales $(3,592) $(2,707) Intersegment shipping costs (3,592) (2,707) ------- ------- Gross profit -- -- Corporate general, selling and administrative expenses 2,415 1,889 526 27.8% Nanocomposite business development expenses 920 1,071 (151) -14.1% ------- ------- ---- Operating loss (3,335) (2,960) (375) 12.7% - -------------------------------------------------------------------------------------
Intersegment shipping sales and costs are related to billings from the transportation segment to the domestic minerals and environmental segments for services. These services are invoiced to the minerals and environmental segments at arms-length rates and those costs are subsequently charged to customers. Intersegment sales and costs reported above reflect the elimination of these transactions. The increase in corporate general, selling and administrative expenses related to higher compensation and employee benefit costs. Approximately 30% of the increase over the second quarter of 2002 related to higher defined benefit pension plan expenses. As disclosed in footnote 5 to the 11 condensed consolidated financial statements, effective January 1, 2003, the Company adopted the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation. The Company elected to record stock-based based compensation costs using fair value under the prospective method. Lower nanocomposite development expenses were due to a decline in research and development costs. Six months ended June 30, 2003 vs. 2002 Net sales for the six months ended June 30, 2003 were $172.7 million compared with $135.9 million for the prior year period. The minerals segment accounted for 60% of net sales while the environmental and transportation segments represented 33% and 7%, respectively. Minerals contributed approximately 67% of the increase in net sales over the prior year period. The environmental and transportation segments contributed 30% and 3%, respectively, to the increase in net sales. The largest component of the increase in net sales was CSM, which was acquired as of May 1, 2002, and is included in the minerals segment. This business accounted for approximately 36% of the increase in net sales for the Company over the prior year period. Gross profit was $41.8 million for the six month period ended June 30, 2003 compared with $31.9 million for the 2002 period. The 31% increase in gross profit followed the increase in net sales. Gross margin improved to 24.2% compared to 23.4%. The improvement was primarily contributed by the minerals segment due to lower production costs at certain domestic business units and the acquisition of CSM. General, selling and administrative expenses were $29.2 for the six month period ended June 30, 2003 compared with $25.1 in the prior year period. CSM accounted for 33% of the increase. Higher pension, insurance and compensation costs were responsible for the remainder of the increase. Operating profit was $12.6 million for the six month period ended June 30, 2003 compared with $6.8 million in the prior year period. The improvement in operating profit followed the increase in sales and gross profit. Operating profit margin for the six month period ended June 30, 2003 was 7.3% compared with 5.0% in the prior year period. Net interest expense was $202 thousand for the six month period ended June 30, 2003 compared with $240 thousand in the prior year period. Lower borrowing rates were the principal reason for the decline in the current year period. Net other income was $162 thousand for the six month period ended June 30, 2003 compared with net other expense of $77 thousand in the prior year period. The primary reason for the change was associated with foreign currency exchange transactions which resulted in a net gain in the current year period compared with a net loss in the prior year period. Income tax expense was $4.3 million for the six month period ended June 30, 2003 compared with $2.3 million for the prior year period. The increase followed the increase in pre-tax income which resulted from higher operating profits as described above. The effective tax rate for the current year period was 34% compared with 36% for the prior year period. The point decline was due to a change in the mix of earnings resulting in lower tax provisions for earnings generated in foreign jurisdictions. 12 Net income was $8.6 million for the six month period ended June 30, 2003 compared with $4.6 million for the prior year period. The increase resulted from the improvement in sales and operating profit described above. Diluted earnings per share totaled $0.29 per share for the current year period compared with $0.15 per share for the 2002 period. Weighted average common and common equivalent shares outstanding decreased by approximately 3% from the prior year period to 29.7 million. The decrease is the result of stock repurchases executed by the Company over the last twelve months. Segment Analysis
- -------------------------------------------------------------------------------------------------- Minerals Six Months Ended June 30, 2003 2002 2003 vs. 2002 (Dollars in Thousands) - -------------------------------------------------------------------------------------------------- Product sales $ 93,903 90.5% $71,801 91.1% Shipping revenue 9,816 9.5% 7,027 8.9% -------- ----- ------- ----- Net sales 103,719 100.0% 78,828 100.0% 24,891 31.6% -------- ----- ------- ----- Cost of sales - product 73,956 71.3% 57,805 73.3% Cost of sales - shipping 9,816 9.5% 7,027 8.9% -------- ----- ------- ----- Cost of sales 83,772 80.8% 64,832 82.2% -------- ----- ------- ----- Gross profit 19,947 19.2% 13,996 17.8% 5,951 42.5% General, selling and administrative expenses 9,148 8.8% 7,475 9.5% 1,673 22.4% -------- ----- ------- ----- ------ Operating profit 10,799 10.4% 6,521 8.3% 4,278 65.6% - --------------------------------------------------------------------------------------------------
Approximately 57% of the $24.9 million increase in minerals net sales over the 2002 period was contributed by CSM which was acquired by the Company on May 1, 2002. The domestic minerals business units contributed approximately 33% of the increase. Sales volume in the domestic metalcasting, oil drilling and pet products businesses increased over the prior year period. Pricing in the current year period in the domestic minerals businesses was comparable to the prior year period. The segment's Asian-based minerals businesses contributed the remainder of the sales increase. Gross profit earned on domestic minerals sales accounted for approximately 60% of the increase over the prior year period. Approximately 25% of the increase in gross profit was attributed to CSM while the segment's Asian-based businesses contributed the remainder. Gross margin improved by 140 basis points to 19.2% for the current year period. The improvement was generated through higher volume associated with the increase in sales relative to the prior year period, and from lower production costs in the pet products business. Approximately 80% of the increase in general, selling and administrative expenses was attributed to CSM. Increases in pension and employee benefit costs for domestic personnel contributed most of the remaining increase. 13
- ------------------------------------------------------------------------------------------------ Environmental Six Months Ended June 30, ----------------------------------------------------------------- 2003 2002 2003 vs. 2002 ----------------------------------------------------------------- (Dollars in Thousands) - ------------------------------------------------------------------------------------------------ Product sales $53,223 92.7% $43,359 93.2% Shipping revenue 4,179 7.3% 3,160 6.8% ------- ----- ------- ----- Net sales 57,402 100.0% 46,519 100.0% 10,883 23.4% ------- ----- ------- ----- Cost of sales - product 33,353 58.1% 27,036 58.1% Cost of sales - shipping 4,179 7.3% 3,160 6.8% ------- ----- ------- ----- Cost of sales 37,532 65.4% 30,196 64.9% ------- ----- ------- ----- Gross profit 19,870 34.6% 16,323 35.1% 3,547 21.7% General, selling and administrative expenses 12,166 21.2% 10,802 23.2% 1,364 12.6% ------- ----- ------- ----- ------ Operating profit 7,704 13.4% 5,521 11.9% 2,183 39.5% - ------------------------------------------------------------------------------------------------
Lining technologies accounted for approximately 60% of the increase in sales. Both domestic and international shipments contributed to the higher lining technology sales. Building materials accounted for approximately 30% of the increase in sales. The increase was primarily led by higher shipments in Europe. The 22% increase in gross profit over the prior year period corresponds with the increase in sales. Gross margin declined by 50 basis points from the prior year period. This was primarily due to the higher proportion of shipping revenue generated by lining technology export shipments. No profit is earned on shipping revenue. Higher professional fees were the primary components of the increase in general, selling and administrative expenses. Compensation and employee benefit costs also increased over the 2002 period.
- ----------------------------------------------------------------------------------------------- Transportation Six Months Ended June 30, ------------------------------------------------------------------- 2003 2002 2003 vs. 2002 ------------------------------------------------------------------- (Dollars in Thousands) - ----------------------------------------------------------------------------------------------- Net sales $18,187 100.0% $15,462 100.0% $2,725 17.6% Cost of sales 16,184 89.0% 13,860 89.6% ------- ----- ------- ----- Gross profit 2,003 11.0% 1,602 10.4% 401 25.0% General, selling and administrative expenses 1,228 6.8% 1,147 7.4% 81 7.1% ------- ----- ------- ----- ------ Operating profit 775 4.2% 455 3.0% 320 70.3% - -----------------------------------------------------------------------------------------------
Intersegment sales contributed approximately 45% of the sales increase over the prior year period. Higher traffic levels and new customer sales accounted for the remainder of the increase. Gross margin increased 60 basis points due to higher equipment utilization rates and better sales pricing. General, selling and administrative expenses increased due to higher compensation and employee benefit costs. 14
- ----------------------------------------------------------------------------------------- Corporate Six Months Ended June 30, ----------------------------------------------------- 2003 2002 2003 vs. 2002 ----------------------------------------------------- (Dollars in Thousands) - ----------------------------------------------------------------------------------------- Intersegment shipping sales $(6,588) $(4,933) Intersegment shipping costs (6,588) (4,933) ------- ------- Gross profit -- -- Corporate general, selling and administrative expenses 4,733 3,479 1,254 36.0% Nanocomposite business development expenses 1,948 2,240 (292) -13.0% ------- ------- ----- Operating loss (6,681) (5,719) (962) 16.8% - -----------------------------------------------------------------------------------------
Intersegment shipping sales and costs are related to billings from the transportation segment to the domestic minerals and environmental segments for services. These services are invoiced to the minerals and environmental segments at arms-length rates and those costs are subsequently charged to customers. Intersegment sales and costs reported above reflect the elimination of these transactions. The increase in corporate general, selling and administrative expenses relate to higher compensation and employee benefit costs. Included in compensation costs in the current period was a portion of the fair value of stock-options granted to employees in the current year. As disclosed in footnote 5 to the condensed consolidated financial statements, effective on January 1, 2003, the Company adopted the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation. The Company elected to prospectively record stock-based based compensation costs using fair value. Lower nanocomposite development expenses were due to a decline in research and development costs. Liquidity and Capital Resources Working capital was $67.6 million and $58.5 million at June 30, 2003 and December 31, 2002, respectively. The current ratio at June 30, 2003 was 2.17-to-1 compared with 2.11-to-1 at December 31, 2002. Net cash provided by operating activities was $1.6 million for the six months ended June 30, 2003 compared with net cash provided by operating activities of $6.2 million in the 2002 six month period. The primary difference in operating cash flow between the two periods was attributed to current assets which increased by $17.2 million in the first six months of 2003 compared to an increase of $8.8 million in the prior year's six month period. Accounts receivable increased by approximately $15.1 million from the December 31, 2002 balance and, therefore, was the major contributor to the increase in current assets. The increase in accounts receivable follows the increase in sales over the three month period ended on June 30, 2003. Capital expenditures were approximately $6.3 million in the first six months of 2003 compared with $7.3 million in the prior year period. Net cash provided by financing activities totaled $1.6 million in the first six months of 2003 compared with $1.8 million for the same period in 2002. The Company borrowed approximately $4.0 15 million from its revolving credit facility during the first six months of 2003 to fund operating working capital needs. Dividends paid on common stock were approximately $2.0 million and the Company repurchased 267 thousand shares of common stock in the first six months of 2003 for a total of approximately $1.6 million. Approximately $3.7 million remains in the stock repurchase authorization approved by the Company's board of directors. The Company received approximately $1.1 million in proceeds from the exercise of stock options by employees and directors in the first six moths of 2003. The Company has a revolving credit facility of $125 million with financial institutions that matures in October 2003. As of June 30, 2003, the Company had approximately $108 million of unused, committed credit lines. The Company is currently in the process of negotiating with financial institutions for a new revolving credit facility with similar terms and borrowing capacity. The existing and anticipated replacement credit facilities combined with funds generated from operations are expected to be adequate to fund capital expenditures and other investments approved by the board of directors at this time. Since the mid 1980's, the Company and/or its subsidiaries have been named as one of a number of defendants in product liability lawsuits relating to the minor free-silica content within the Company's bentonite products used in the metalcasting industry. The plaintiffs in these lawsuits are primarily employees of the Company's foundry customers. To date, the Company has not incurred significant costs in defending these matters. The Company believes it has adequate insurance coverage and does not believe the litigation will have a material adverse impact on the financial condition, liquidity or results of operations of the Company. Item 3: Quantitative and Qualitative Disclosure About Market Risk There have been no material changes in the Company's market risk during the three months ended June 30, 2003. See disclosures as of December 31, 2002 in the Company's Annual Report on Form 10-K, Item 7A. Item 4: Controls and Procedures As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of the Company's management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules. There have been no significant changes in the Company's internal controls over financial reporting or in other factors that could significantly affect those controls subsequent to the date the evaluation was carried out. 16 PART II - OTHER INFORMATION Item 4: Submission of Matters to a Vote of Security Holders (a) The Annual Stockholders Meeting of the Company was held on May 15, 2003. (b) At the Annual Stockholders Meeting, the Stockholders voted on the following uncontested matters: each nominee for director was elected by a vote of the Stockholders; and each matter was approved by a vote of the Stockholders as follows: 1. Election of the below-named Nominees of the Board of Directors of AMCOL International Corporation: - -------------------------------------------------------------------------------- For Withheld - -------------------------------------------------------------------------------- Robert E. Driscoll, III 21,236,278 2,066,762 Daniel P. Casey 22,705,070 597,970 Dale E. Stahl 21,230,831 2,072,209 - -------------------------------------------------------------------------------- 2. To amend AMCOL's 1998 Long-Term Incentive Plan - -------------------------------------------------------------------------------- For Against Abstain - -------------------------------------------------------------------------------- 21,138,185 2,119,508 45,343 - -------------------------------------------------------------------------------- 3. To ratify the appointment of AMCOL's independent auditor's (KPMG, LLP) - -------------------------------------------------------------------------------- For Against Abstain - -------------------------------------------------------------------------------- 19,889,380 3,384,791 28,867 - -------------------------------------------------------------------------------- Item 6: Exhibits and Reports on Form 8-K (a) See Index to Exhibits immediately following the signature page. (b) A current report on Form 8-K was filed on April 21, 2003, furnishing a press release disclosing the Company's operating results for the first quarter ended March 31, 2003. 17 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. AMCOL INTERNATIONAL CORPORATION Date: August 12, 2003 /s/ Lawrence E. Washow ---------------------------------------------- Lawrence E. Washow President and Chief Executive Officer Date: August 12, 2003 /s/ Gary L. Castagna ---------------------------------------------- Gary L. Castagna Senior Vice President and Chief Financial Officer and Principal Accounting Officer CERTIFICATIONS 08/12/03 Lawrence E. Washow 08/12/03 Gary L. Castagna 18 INDEX TO EXHIBITS Exhibit Number - -------- 3.1 Restated Certificate of Incorporation of the Company (5), as amended (10), as amended (16) 3.2 Bylaws of the Company (10) 4 Article Four of the Company's Restated Certificate of Incorporation (5), as amended (16) 10.3 Lease Agreement for office space dated September 29, 1986, between the Company and American National Bank and Trust Company of Chicago; (1) First Amendment dated June 2, 1994 (8); Second Amendment dated June 2, 1997 (13) 10.4 AMCOL International Corporation 1987 Non-Qualified Stock Option Plan (2); as amended (6) 10.9 AMCOL International Corporation Dividend Reinvestment and Stock Purchase Plan (4); as amended (6) 10.10 AMCOL International Corporation 1993 Stock Plan, as amended and restated (10) 10.11 Credit Agreement by and among AMCOL International Corporation and Harris Trust and Savings Bank, individually and as agent, NBD Bank, LaSalle National Bank and the Northern Trust Company dated October 4, 1994 (7); First Amendment to Credit Agreement dated September 25, 1995 (9), Second Amendment to Credit Agreement dated March 28, 1996 (-), Third Amendment to Credit Agreement dated September 12, 1996 (11), Fourth Amendment to Credit Agreement dated December 15, 1998 (18) and Fifth Amendment to Credit Agreement dated May 26, 2000 (20) 10.15 AMCOL International Corporation 1998 Long-Term Incentive Plan (15), as amended (21) 10.26 Employment Agreement dated March 15, 2002 by and between Registrant and Gary D. Morrison (22) 10.27 Employment Agreement dated March 15, 2002 by and between Registrant and Peter M. Maul (22) 10.28 Employment Agreement dated March 15, 2002 by and between Registrant and Gary Castagna (22) 10.29 Employment Agreement dated March 15, 2002 by and between Registrant and Ryan F. McKendrick (22) 10.30 Employment Agreement dated March 15, 2002 by and between Registrant and Lawrence E. Washow (22) 31 Rule 13a - 14(a) / 15d-14(a) Certifications 32 Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350, dated August 12, 2003 - ---------- (1) Exhibit is incorporated by reference to the Registrant's Form 10 filed with the Securities and Exchange Commission on July 27, 1987. (2) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1988. (3) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1993. (4) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1992. (5) Exhibit is incorporated by reference to the Registrant's Form S-3 filed with the Securities and Exchange Commission on September 15, 1993. (6) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1993. (7) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 1994. (8) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1994. (9) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 1995. (10) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1995. (11) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1996. 19 (13) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed with the Securities and Exchange Commission for the quarter ended June 30, 1997. (15) Exhibit is incorporated by reference to the Registrant's Form S-8 (File 333-56017) filed with the Securities and Exchange Commission on June 4, 1998. (16) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed with the Securities and Exchange Commission for the quarter ended June 30, 1998. (18) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 1999. (19) Exhibit is incorporated by reference to the Registrant's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1999. (20) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed with the Securities and Exchange Commission for the quarter ended June 30, 2000. (21) Exhibit is incorporated by reference to the Registrant's Form S-8 (File 333-68664) filed with the Securities and Exchange Commission on August 30, 2001. (22) Exhibit is incorporated by reference to the Registrant's Form 10-Q filed with the Securities and Exchange Commission for the quarter ended March 31, 2002. 20 EX-31.1 3 e15461ex31_1.txt CERTIFICATION Exhibit 31.1 AMCOL INTERNATIONAL CORPORATION CERTIFICATION Pursuant to Rule 13a - 14(a) / 15d-14(a) I, Gary L. Castagna, certify that: 1. I have reviewed this quarterly report on Form 10-Q of AMCOL International Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 12, 2003 /s/ Gary L. Castagna ------------------------------------------ Gary L. Castagna Senior Vice President, Chief Financial Officer and Principal Accounting Officer EX-31.2 4 e15461ex31_2.txt CERTIFICATION Exhibit 31.2 AMCOL INTERNATIONAL CORPORATION CERTIFICATION Pursuant to Rule 13a - 14(a) / 15d-14(a) I, Lawrence E. Washow, certify that: 1. I have reviewed this quarterly report on Form 10-Q of AMCOL International Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 12, 2003 /s/ Lawrence E. Washow -------------------------------------- Lawrence E. Washow President and Chief Executive Officer EX-32.1 5 e15461e32_1.txt CERTIFICATION OF PERIODIC FINANCIAL REPORT Exhibit 32.1 AMCOL INTERNATIONAL CORPORATION Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350 Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of AMCOL International Corporation (the "Company") certifies that the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: August 12, 2003 /s/ Lawrence E. Washow -------------------------- Lawrence E. Washow Chief Executive Officer A signed original of this written statement required by Section 906 has been provided to AMCOL International Corporation and will be retained by AMCOL International Corporation and furnished to the Securities and Exchange Commission or it's staff upon request. EX-32.2 6 e15461ex32_2.txt CERTIFICATION OF PERIODIC FINANCIAL REPORT Exhibit 32.2 AMCOL INTERNATIONAL CORPORATION Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350 Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of AMCOL International Corporation (the "Company") certifies that the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: August 12, 2003 /s/ Gary L. Castagna ----------------------------------------------- Gary L. Castagna Senior Vice President, Chief Financial Officer and Principal Accounting Officer A signed original of this written statement required by Section 906 has been provided to AMCOL International Corporation and will be retained by AMCOL International Corporation and furnished to the Securities and Exchange Commission or it's staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----