-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, TXtFUFzktlx6Hmt2iC5iEig6A/zW8WXQV2XY/GEOubu7NkN2ZDDQRJuMJ/23J5t5 4+Wi1uUh7HrOdmRedYDlMg== 0000912057-95-003091.txt : 19950504 0000912057-95-003091.hdr.sgml : 19950504 ACCESSION NUMBER: 0000912057-95-003091 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950503 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN COLLOID CO 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: 000-15661 FILM NUMBER: 95534271 BUSINESS ADDRESS: STREET 1: 1500 W SHURE DR SUITE 500 STREET 2: 1500 W SHURE DR CITY: ARLINGTON HEIGHTS STATE: IL ZIP: 60004-7803 BUSINESS PHONE: 7083924600 MAIL ADDRESS: STREET 1: ONE N ARLINGTON STREET 2: 1500 W SHURE DR SUITE 500 CITY: ARLINGTON HEIGHTS STATE: IL ZIP: 60004-7803 10-Q 1 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 ----------------------------------------------- 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 --------------------------------------------------------- AMERICAN COLLOID COMPANY - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 36-0724340 - ------------------------------------------------------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 1500 West Shure Drive, Suite 500, Arlington Heights, Illinois 60004-7803 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (708) 392-4600 - ------------------------------------------------------------------------------- (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 shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------ ------ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at April 21, 1995 - ----------------------------------- ------------------------------------- (Common stock, $.01 par value) 19,144,715 AMERICAN COLLOID COMPANY INDEX Page No. -------- PART I - FINANCIAL INFORMATION - ------------------------------ Item 1 Financial Statements Condensed Consolidated Balance Sheet - March 31, 1995 and December 31, 1994 1 Condensed Consolidated Statement of Operations - three months ended March 31, 1995 and 1994 2 Condensed Consolidated Statement of Cash Flows - three months ended March 31, 1995 and 1994 3 Notes to Condensed Consolidated Financial Statements 4 Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 5 PART II - OTHER INFORMATION - --------------------------- Item 6 Exhibits and Reports on Form 8-K 10 Part I - FINANCIAL INFORMATION AMERICAN COLLOID COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) (IN THOUSANDS)
ASSETS MARCH 31, DECEMBER 31, 1995 1994* ---------- ------------ Current assets: Cash and cash equivalents $3,326 $10,389 Accounts receivable 56,399 50,908 Inventories 38,371 37,450 Advance mining 2,250 2,363 Prepaid expenses 1,861 2,213 Current deferred tax asset 2,526 2,516 ---------- ------------ Total current assets 104,733 105,839 ---------- ------------ Property, plant, equipment and mineral reserves 252,158 225,532 Less accumulated depreciation 88,370 84,112 ---------- ------------ 163,788 141,420 ---------- ------------ Intangible assets 9,060 9,208 ---------- ------------ Other long-term assets 4,440 4,580 ---------- ------------ $282,021 $261,047 ---------- ------------ ---------- ------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable and current maturities of debt $3,334 $3,507 Accounts payable 16,918 19,373 Accrued income taxes 2,482 807 Accrued liabilities 14,460 12,930 ---------- ------------ Total current liabilities 37,194 36,617 ---------- ------------ Long-term debt 85,855 71,458 ---------- ------------ Deferred credits and minority interest 11,593 11,653 ---------- ------------ Stockholders' equity: Common stock 213 213 Additional paid-in capital 74,626 74,279 Foreign currency translation adjustment 1,182 (1,865) Retained earnings 74,645 72,157 Treasury stock (3,287) (3,465) ---------- ------------ 147,379 141,319 ---------- ------------ $282,021 $261,047 ---------- ------------ ---------- ------------ *Condensed from audited financial statements.
The accompanying notes are an integral part of these condensed financial statements 1 AMERICAN COLLOID COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) (IN THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)
THREE MONTHS ENDED MARCH 31, ----------------------- 1995 1995 ---------- ---------- Net sales $78,750 $57,846 Cost of sales 61,374 45,929 ---------- ---------- Gross profit 17,376 11,917 General, selling and administrative expenses 10,818 7,864 ---------- ---------- Operating profit 6,558 4,053 ---------- ---------- Other income (expense): Interest expense, net (1,068) (344) Other income, net 142 77 ---------- ---------- (926) (267) ---------- ---------- Income before income taxes and minority interest 5,632 3,786 Income taxes 1,975 1,271 ---------- ---------- Income before minority interest 3,657 2,515 Net income of minority interest (26) (25) ---------- ---------- Net income $3,631 $2,490 ---------- ---------- ---------- ---------- Weighted average common and common equivalent shares 19,589,537 19,444,476 ---------- ---------- Earnings per share $.19 $.13 ---------- ---------- ---------- ---------- Dividends declared per share $.06 $.06 ---------- ---------- ---------- ----------
The accompanying notes are an integral part of these condensed financial statements. 2 AMERICAN COLLOID COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (IN THOUSANDS) THREE MONTHS ENDED MARCH 31, ---------------------- 1995 1994 ------- ------- Cash flow from operating activities: Net income $ 3,631 $ 2,490 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion, and amortization 4,385 3,055 Other 232 150 (Increase)/decrease in current assets (6,318) (3,335) Increase/(decrease) in current liabilities 750 (2,687) ------- ------- Net cash provided by (used in) operations 2,680 (327) ------- ------- Cash flow from investing activities: Acquisition of land, mineral reserves, depreciable and intangible assets (25,060) (25,149) Other 1,713 (178) ------- ------- Net cash used in investing activities (23,347) (25,327) ------- ------- Cash flow from financing activities: Net change in outstanding debt 14,224 9,920 Dividends paid (1,145) (1,120) Other 525 135 ------- ------- Net cash provided by financing activities 13,604 8,935 ------- ------- Net (decrease) in cash and cash equivalents (7,063) (16,719) Cash and cash equivalents at beginning of period 10,389 20,502 ------- ------- Cash and cash equivalents at end of period $ 3,326 $ 3,783 ------- ------- ------- ------- Supplemental Disclosure of Cash Flows Information (In thousands) Actual cash paid for: Interest $ 279 $ 90 ------- ------- ------- ------- Income taxes $ 497 $ 822 ------- ------- ------- -------
The accompanying notes are an integral part of these condensed financial statements. 3 AMERICAN COLLOID COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (IN THOUSANDS) NOTE 1: BASIS OF PRESENTATION The financial information included herein, other than the condensed consolidated balance sheet as of December 31, 1994, has been prepared by management without audit by independent certified public accountants who do not express an opinion thereon. The condensed consolidated balance sheet as of December 31, 1994, has been derived from and does not include all the disclosures contained in the audited consolidated financial statements for the year ended December 31, 1994. The information furnished herein includes all adjustments which are, in the opinion of management, necessary for a fair statement of the results of the interim period, and all such adjustments are of a normal recurring nature. Management recommends the accompanying consolidated financial information be read in conjunction with the consolidated financial statements and related notes included in the Company's 1994 Form 10-K which accompanies the 1994 Corporate Report. The results of operations for the three month period ended March 31, 1995, are not necessarily indicative of the results to be expected for the full year. Certain items in the 1994 consolidated financial statements have been reclassified to comply with the consolidated financial statements presentation for 1995. NOTE 2: INVENTORIES Inventories at March 31, 1995 have been valued using the same methods as at December 31, 1994. LIFO inventory values have been calculated based upon anticipated ending inventory levels at December 31, 1995, and anticipated mining costs for fiscal year 1995. The composition of inventories at March 31, 1995 and December 31, 1994, was as follows:
MARCH 31, DECEMBER 31, 1995 1994 -------- -------- Crude stockpile and in-process inventories $22,146 $21,922 Other raw material, container and supplies inventories $16,225 $15,528 -------- -------- Other $38,371 $37,450 -------- -------- -------- --------
NOTE 3: EARNINGS PER SHARE Earnings per share are computed by dividing net income by the weighted average number of common shares outstanding and the dilutive effect of stock options outstanding at the end of each period. 4 AMERICAN COLLOID COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management's discussion and analysis of certain significant factors which have affected the Company's financial position and operating results during the periods included in the accompanying condensed consolidated financial statements. THREE MONTHS ENDED MARCH 31, 1995 VS. 1994 Net sales increased by $20.9 million, or 36.1%, while gross profits and operating profits increased by $5.5 million, or 45.8%, and $2.5 million, or 61.8%, respectively. Net interest expense increased by $.7 million, or 210.5%, as March 31, 1995 debt (both long and short-term) increased by $58.1 million, or 186.9%, over the prior year quarter. Also, approximately $.4 million of interest related to plant expansion was capitalized in the 1995 quarter compared with $.1 million in the 1994 period. Other income included a government grant for the U.K. polymer expansion, which more than offset the provision for settlement of outstanding litigation. Earnings per share were $.19 per share for the 1995 quarter compared with $.13 for the prior year. A brief discussion by business segment follows:
QUARTER ENDED MARCH 31, ---------------------------------------------------------------- 1995 1994 1995 VS. 1994 ----------------- ------------------ ------------------ MINERALS (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE - -------- --------- -------- Net sales $39,097 100.0% $37,020 100.0% $2,077 5.6% Cost of sales 31,070 79.5% 30,138 81.4% ------- ------ ------- ----- Gross profit 8,027 20.5% 6,882 18.6% 1,145 16.6% General, selling and administrative expenses 4,236 10.8% 3,289 8.9% 947 28.8% ------- ------ ------- ----- Operating profit 3,791 9.7% 3,593 9.7% 198 5.5%
Sales increased by $2.1 million, or 5.6%, over the prior year period. Continued strength in the durable goods sector, primarily metalcasting, and further growth in cat litter provided much of the volume growth in the minerals segment. The dollar was weaker in 1995 than in 1994, resulting in higher translation rates for U.K. sales. The difference accounted for approximately 20% of the sales increase. Price increases in certain markets accounted for the gross profit margin improvement. The increase in general, selling and administrative expenses was primarily related to increased research activities and a more precise split of costs shared with corporate, such as management information systems and corporate office support functions. 5 AMERICAN COLLOID COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
QUARTER ENDED MARCH 31, --------------------------------------------------------------------- 1995 1994 1995 VS. 1994 ------------------- ---------------------- --------------------- ABSORBENT POLYMERS (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE - ------------------- --------- --------- Net sales $26,480 100.0% $12,205 100.0% $14,275 117.0% Cost of sales 20,302 76.7% 9,045 74.1% ------- ------ ------- ------ Gross profit 6,178 23.3% 3,160 25.9% 3,018 95.5% General, selling and administrative expenses 2,094 7.9% 1,653 13.5% 441 26.7% ------- ------ ------- ------ Operating profit 4,084 15.4% 1,507 12.4% 2,577 171.0%
Revenues increased by $14.3 million, or 117.0% over the prior year as sales volume increased by 122.4%. The weaker U.S. dollar resulted in higher translation rates for U.K. sales, accounting for approximately 7% of the segment sales increase. Gross profit margins declined by 260 basis points, as raw material costs increased and selling prices declined from the prior year. Raw material costs are expected to rise again in the second quarter of 1995. It is anticipated that raw material costs will be stable or declining in the third and fourth quarters of 1995. Plant expansion in the U.S. continues. An additional 30,000 metric tons of capacity is scheduled to be available in the third quarter of 1995. The current worldwide capacity for the Company is 80,000 metric tons, which will increase to 110,000 metric tons with the completion of the U.S. expansion. 6 AMERICAN COLLOID COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
QUARTER ENDED MARCH 31, --------------------------------------------------------------------- 1995 1994 1995 VS. 1994 ------------------- ---------------------- --------------------- ENVIRONMENTAL (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE - ------------------- --------- --------- Net sales $ 7,925 100.0% $ 3,942 100.0% $ 3,983 101.0% Cost of sales 5,397 68.1% 2,654 67.3% ------ ----- ------- ----- Gross profit 2,528 31.9% 1,288 32.7% 1,240 96.3% General, selling and administrative expenses 2,519 31.8% 1,129 28.7% 1,390 123.1% ------ ----- ------ ----- Operating profit 9 0.1% 159 4.0% (150) -94.3%
Sales increased by $4.0 million, or 101.0%, over the prior year period. Sales from businesses acquired during the second and third quarters of 1994 accounted for approximately 45% of the increase. Strong sales of products to the construction industry (both domestic and international) also contributed to the increase. General, selling and administrative expenses increased by $1.4 million, or 123.1%. The acquired businesses accounted for approximately 41%, with additional sales and research staff and infrastructure costs accounting for the balance of the increase.
QUARTER ENDED MARCH 31, --------------------------------------------------------------------- 1995 1994 1995 VS. 1994 ------------------- ---------------------- --------------------- TRANSPORTATION (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE - ------------------- --------- --------- Net sales $ 5,248 100.0% $ 4,679 100.0% $ 569 12.2% Cost of sales 4,605 87.7% 4,092 87.5% ------- ----- ------- ----- Gross profit 643 12.3% 587 12.5% 56 9.5% General, selling and administrative expenses 387 7.4% 365 7.8% 22 6.0% ------- ----- ------- ----- Operating profit 256 4.9% 222 4.7% 34 15.3%
Shipments of cat litter and bentonite used for manufacturing environmental liner products accounted for much of the higher sales volume. Much of the bentonite used in manufacturing liner products has since been converted to rail transportation. This loss of volume will have an adverse impact on the segment revenues in the near term. 7 AMERICAN COLLOID COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
QUARTER ENDED MARCH 31, ------------------------------------------------------------ 1995 1994 1995 VS. 1994 ------------------ --------------------- ------------------ CORPORATE (DOLLARS IN THOUSANDS) $ CHANGE % CHANGE - --------- -------- -------- General, selling and administrative expenses $ 1,582 $ 1,428 $ 154 10.8% ------- ------- Operating profit (1,582) (1,428)
Corporate costs include management information systems, human resources, investor relations and corporate communications, corporate finance, research costs for new markets and corporate governance costs. The 1995 quarter reflects a more precise split of shared costs with the minerals segment. Higher management information systems costs and research expenditures accounted for the increase in corporate expenses. 8 AMERICAN COLLOID COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) LIQUIDITY AND CAPITAL RESOURCES At March 31, 1995, the Company had outstanding debt of $89.2 million (including both long and short term debt) and cash of $3.3 million compared with $75 million in debt and $10.4 million in cash and cash equivalents at December 31, 1994. The long-term debt to total capitalization at March 31, 1995 was 36.8% compared with 33.6% at December 31, 1994. The Company had a current ratio of 2.82 to 1 at March 31, 1995 with approximately $67.5 million in working capital compared with 2.89 to 1 and $69.2 million, respectively, at December 31, 1994. The Company had $27.7 million in unused, committed credit lines at March 31, 1995. During the first quarter of 1995, the Company used its operating cash flow plus $7.1 million of its cash reserves and $14.2 million of debt to pay dividends of $1.1 million, and acquire property and equipment totaling $25.1 million. The Company has adequate committed credit facilities to fund the capital expenditure program approved by the Board of Directors at this time. Management continues to explore other growth prospects in the environmental sector, as well as yet further expansion in the polymer segment. Additional capital may be required if these opportunities are pursued. 9 PART II - OTHER INFORMATION ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K (a) See Index to Exhibits immediately following the signature page. (b) No reports on Form 8-K have been filed during the quarter ended March 31, 1995. 10 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. AMERICAN COLLOID COMPANY Date: 5/1/95 /s/ John Hughes ------------------------ ----------------------------- John Hughes President and Chief Executive Officer Date: 5/1/95 /s/ Paul G. Shelton ----------------------- ------------------------------- Paul G. Shelton Senior Vice President and Chief Financial Officer 11 INDEX TO EXHIBITS
EXHIBIT NUMBER - -------- 3.1 Restated Certificate of Incorporation of the Company(5) 3.2 Bylaws of the Company(1) 4 Article Fourth of the Company's Restated Certificate of Incorporation(5) 10.1 American Colloid Company 1983 Incentive Stock Option Plan(1); as amended(3) 10.2 American Colloid Company Pension Plan(3) 10.3 American Colloid Company Salaried Employees' Savings Plan and Trust(1); as amended(4) 10.4 Executive Medical Reimbursement Plan(1) 10.5 Lease Agreement for office space dated September 29, 1986 between the Company and American National Bank and Trust Company of Chicago(1); as amended (8) 10.6 American Colloid Company 1987 Non-Qualified Stock Option Plan (2); as amended (6) 10.7 Change in Control Agreement dated April 1, 1994 by and between Registrant and John Hughes (6) 10.8 Change in Control Agreement dated April 1, 1994 by and between Registrant and Paul G. Shelton (6) 10.9 Change in Control Agreement dated December 15, 1992 by and between Registrant and Robert C. Steele (4) 10.10 Change in Control Agreement dated December 21, 1992 by and between Lawrence E. Washow (4) 10.11 Change in Control Agreement dated December 15, 1992 by and between Registrant and Roger P. Palmer (4) 10.12 Change in Control Agreement dated January 24, 1994 by and between Registrant and Peter L. Maul (6) 10.13 American Colloid Company Dividend Reinvestment and Stock Purchase Plan (4); as amended (6) 10.14 American Colloid Company 1993 Stock Plan (6) 10.15 Credit Agreement by and among American Colloid Company 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) 10.16 Note Agreement dated October 1, 1994 between American Colloid Company and Principal Mutual Life Insurance Company (7) 27 Financial Data Schedule ___________________ (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, 1989. (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.
EX-27 2 EXHIBIT 27
5 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 3,326 0 56,463 1,697 38,371 104,733 252,158 88,370 282,021 37,194 85,855 213 0 0 147,166 282,021 78,750 78,750 61,374 72,193 142 361 (1,201) 5,632 1,975 3,657 0 0 0 3,631 0 .19
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