-----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, QNVCmSzGPh1QQk1qsj0cCsIH+1BMlpiTxRidsAou+GtT/lkpU2txBGBsVPQYypm6 8pn+TCNp5L5qHb1oIpoqxQ== 0000950134-97-007446.txt : 19971017 0000950134-97-007446.hdr.sgml : 19971017 ACCESSION NUMBER: 0000950134-97-007446 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19971016 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNSHINE MINING & REFINING CO CENTRAL INDEX KEY: 0000833376 STANDARD INDUSTRIAL CLASSIFICATION: PRIMARY SMELTING & REFINING OF NONFERROUS METALS [3330] IRS NUMBER: 752231378 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 001-10012 FILM NUMBER: 97697035 BUSINESS ADDRESS: STREET 1: 877 WEST MAIN STREET STREET 2: SUITE 600 CITY: BOISES STATE: ID ZIP: 83702 BUSINESS PHONE: 2083450660 MAIL ADDRESS: STREET 1: 877 W MAIN STREET SUITE 600 CITY: BOISE STATE: ID ZIP: 83702 FORMER COMPANY: FORMER CONFORMED NAME: SUNSHINE MINING CO /DE DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: SUNSHINE HOLDINGS INC DATE OF NAME CHANGE: 19880915 10-Q/A 1 AMENDED 10-Q 1 FORM 10-Q/A SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Transition Period From ______________________ to _____________________ Commission File Number 1-10012 SUNSHINE MINING AND REFINING COMPANY - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 75-2618333 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 877 W. Main, Suite 600, Boise, Idaho 83702 - -------------------------------------------------------------------------------- (Address of principal executive offices) Registrant's telephone number including area code (208) 345-0660 -------------- - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Number of Shares Outstanding Title of Each Class of Common Stock at August 4, 1997 - ----------------------------------- ---------------------------- Common Stock, $.01 par value 255,137,312 Page 1 of 9 2 SUNSHINE MINING AND REFINING COMPANY AMENDMENT NO. 1 TO QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997 The undersigned registrant hereby amends the following items, exhibits or other portions of its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997, as set forth in the pages attached hereto: PART 1 Item 1. Financial Statements. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. PART III Item 6. Exhibits and Report on Form 8-K. Exhibit No. 27.1 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. SUNSHINE MINING AND REFINING COMPANY By: /s/ William W. Davis -------------------------------------------- William W. Davis Executive Vice President and Chief Financial Officer October 16, 1997 Dallas, Texas 2 3 SUNSHINE MINING AND REFINING COMPANY CONSOLIDATED BALANCE SHEETS (In Thousands)
(Unaudited) June 30 December 31 1997 1996 ------------ ------------ ASSETS Current assets: Cash and cash investments $ 7,157 $ 16,317 Silver bullion 7,765 7,989 Accounts receivable 1,277 2,624 Inventories (Note 2) 2,598 2,523 Other current assets 1,400 1,108 ------------ ------------ Total current assets 20,197 30,561 Property, plant and equipment, at cost 142,261 141,409 Less accumulated depreciation, depletion and amortization (74,448) (72,124) ------------ ------------ 67,813 69,285 Investments and other assets 5,078 5,640 ------------ ------------ Total assets $ 93,088 $ 105,486 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,611 $ 987 Accrued expenses 3,720 4,015 ------------ ------------ Total current liabilities 5,331 5,002 Long-term debt 26,494 25,780 Accrued pension and other postretirement benefits 5,959 6,074 Other long-term liabilities and deferred credits 4,613 5,032 Stockholders' equity: Common stock--$.01 par value; 600,000 shares authorized; shares issued: June 30, 1997 - 259,803 December 31, 1996 - 259,652 2,598 2,597 Paid-in capital 711,092 711,093 Deficit (661,760) (648,847) ------------ ------------ 51,930 64,843 Less treasury stock, at cost: June 30, 1997 - 4,666 shares December 31, 1996 - 4,671 shares 1,239 1,245 ------------ ------------ 50,691 63,598 ------------ ------------ Total liabilities and stockholders' equity $ 93,088 $ 105,486 ============ ============
See accompanying notes. 3 4 SUNSHINE MINING AND REFINING COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Amounts) (Unaudited)
Quarter Ended Six Months Ended June 30, June 30, -------------------- -------------------- 1997 1996 1997 1996 -------- -------- -------- -------- Operating revenues $ 4,758 $ 4,025 $ 11,312 $ 7,352 Mark to market loss (372) (1,074) (186) (604) -------- -------- -------- -------- 4,386 2,951 11,126 6,748 -------- -------- -------- -------- Costs and expenses: Cost of revenues 5,456 4,580 11,964 8,205 Depreciation, depletion and amortization 1,214 1,061 2,522 2,021 Exploration 2,048 1,950 4,410 4,474 Selling, general and administrative expense 1,461 1,367 2,841 2,619 -------- -------- -------- -------- 10,179 8,958 21,737 17,319 -------- -------- -------- -------- Operating loss (5,793) (6,007) (10,611) (10,571) Other income (expense): Interest income 200 429 410 611 Interest and debt expense (1,384) (1,309) (2,743) (1,639) Other, net (4) 25 31 83 -------- -------- -------- -------- (1,188) (855) (2,302) (945) -------- -------- -------- -------- Net loss (6,980) (6,862) (12,913) (11,516) Gain on retirement and exchange of preferred stock -- 40,124 -- 40,124 Preferred stock dividend requirements -- (150) -- (2,622) -------- -------- -------- -------- Income (loss) applicable to common shares $ (6,980) $ 33,112 $(12,913) $ 5,986 ======== ======== ======== ======== Income (loss) per common share: Primary $ (0.03) $ 0.16 $ (0.05) $ 0.13 ======== ======== ======== ======== Fully diluted $ (0.03) $ 0.15 $ (0.05) $ 0.12 ======== ======== ======== ======== Weighted average common shares outstanding 255,137 212,471 255,100 202,230 ======== ======== ======== ========
See accompanying notes. 4 5 SUNSHINE MINING AND REFINING COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) (Unaudited)
Six Months Ended June 30, 1997 1996 -------- -------- Cash used by operating activities: Net loss $(12,913) $(11,516) Adjustments to reconcile net loss to net cash used by operations: Depreciation, depletion and amortization 2,522 2,021 Amortization of debt issuance costs and accretion of debt discount 1,037 548 Other -- (60) Net (increase) decrease in: Silver bullion 224 601 Accounts receivable 1,347 (135) Inventories (74) (586) Other assets and deferred charges (328) (340) Net increase (decrease) in: Accounts payable and accrued expenses 479 1,862 Accrued pension and other postretirement benefits (114) 79 Other liabilities and deferred credits (413) (749) -------- -------- Net cash used by operations (8,233) (8,275) -------- -------- Cash provided (used) by investing activities: Additions to property, plant and equipment (1,050) (1,723) Proceeds from investments 273 700 -------- -------- Net cash used by investing activities (777) (1,023) -------- -------- Cash provided (used) by financing activities: Costs associated with conversion of preferred stock into common stock -- (1,028) Proceeds from issuance of common stock upon exercise of stock options and warrants -- 1 Proceeds from issuance of long term debt -- 30,000 Debt issuance costs (150) (2,320) -------- -------- Net cash provided (used) by financing activities (150) 26,653 -------- -------- Increase (decrease) in cash and cash investments (9,160) $ 17,355 Cash and cash investments, January 1 16,317 12,837 -------- -------- Cash and cash investments, June 30 $ 7,157 $ 30,192 ======== ======== Supplemental cash flow information - Interest paid in cash $ 1,411 876 ======== ========
See accompanying notes. 5 6 SUNSHINE MINING AND REFINING COMPANY NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS June 30, 1997 1. BASIS OF PRESENTATION The accompanying unaudited consolidated condensed financial statements of Sunshine Mining and Refining Company ("Sunshine" or the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 1997 are not necessarily indicative of the results that may be expected for the year ended December 31, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in Sunshine's report on Form 10-K for the year ending December 31, 1996. Exploration costs, previously reported in the consolidated statements of cash flows as investing activities, have been included in cash used in operating activities. 2. INVENTORIES The components of inventory consist of the following:
June 30 December 31 1997 1996 ------- ----------- Precious Metals Inventories: Work in process $1,169 $1,144 Finished goods 309 405 Materials and supplies inventories 1,120 974 ------ ------ $2,598 $2,523 ====== ======
3. RECENT ACCOUNTING PRONOUNCEMENTS In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share" which becomes effective for the Company's 1997 consolidated financial statements beginning in the fourth quarter of 1997. SFAS No. 128 will eliminate the disclosure of primary earnings per share which includes the dilutive effect of stock options, warrants and other convertible securities ("Common Stock Equivalents") and instead requires reporting of "basic" earnings per share, which will exclude Common Stock Equivalents. Additionally, SFAS No. 128 changes the methodology for fully diluted earnings per share. In the opinion of the Company's management, it is not anticipated that the adoption of this new accounting standard will have a material effect on the reported earnings per share of the Company. 6 7 4. LONG-TERM DEBT Recently, the Securities and Exchange Commission advised the Company that the 22 1/2% additional payment which will be required to be paid on the Company's $30 million Senior Exchangeable Notes due 2000 (Eurobonds) in the event the market price of the Company's common stock does not equal or exceed 133% of the exchange price of the common stock for 45 consecutive stock exchange business days; during the period from May 1, 1996 through May 1, 1999, should be accounted for as an increase in the effective interest rate on the Eurobonds. Accordingly, the Company has restated its financial statements for the first two quarters of 1997 and calendar year 1996 to reflect a discount on the notes and additional paid in capital, as well as increased interest expense. As a result, at June 30, 1997, long-term debt was decreased by $5,021 and paid in capital was increased by $6,750. Net loss was increased by $370 and $714, respectively (less than $.01 per share) for the three months and six months ended June 30, 1997. Accumulated deficit was increased $1,729 at June 30, 1997. 7 8 RESULTS OF OPERATIONS THE THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 1996 Consolidated operating revenues increased approximately $0.7 million for the second quarter of 1997 compared to the second quarter of 1996. The increase in operating revenues resulted from an increase in silver sales volumes (764,000 ounces of silver in the 1997 quarter compared to 655,000 ounces in the 1996 quarter) and the associated $0.6 million increase in by-product revenue partially offset by a $0.52 (10.1%) decrease in average silver price received per ounce. The silver sales volume increase primarily resulted from a 145,000 ounce (22%) increase in production in the 1997 quarter. Mark to market losses on silver in work-in-process inventories and investment silver bullion decreased $0.7 million. The mark to market losses were caused by declines in the silver price during the periods, resulting in writedowns of the value of the Company's work-in-process inventories and silver bullion held for investment. Cost of revenues increased $0.9 million (19%) (from $4.6 million in the 1996 quarter to $5.5 million in the 1997 quarter) primarily due to the 22% increase in production in 1997, partially offset by lower unit production costs. Unit production costs decreased $.58 (9.4%) to $5.60 per ounce of silver primarily due to the increase in silver production from 1996 to 1997 (803 thousand ounces produced from 37,867 tons at 21.98 ounces per ton in 1997 versus 659 thousand ounces from 28,077 tons at 24.17 ounces per ton in 1996). Depreciation, depletion and amortization increased by approximately $153 thousand as a result of increased production in the 1997 period. Interest income decreased $229 thousand due to lower average invested cash balances. THE SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1996 Consolidated operating revenues increased approximately $4.0 million (53.9%) for the first six months of 1997 compared to the first six months of 1996 primarily due to an increase in sales volume (1.8 million ounces of silver in the first six months of 1997 compared to 1.2 million ounces of silver in the same period of 1996) and the associated $1.3 million increase in by-product revenue. The increase in sales volumes primarily resulted from a 491,000 ounce (40.5%) increase in production in 1997 compared to 1996, and a 53 thousand ounce increase in sales volume of finished silver. Mark to market losses on work-in-process silver inventories and silver bullion held for investment amounted to $186 thousand and $604 thousand in 1997 and 1996, respectively. The losses were due to declines in the per ounce silver price during the periods, from $4.74 to $4.60 between December 31, 1996 and June 30, 1997; and from $5.28 to $4.98 between December 31, 1995 to June 30, 1996. The price per ounce has declined further since June 30, 1997 and additional mark to market losses will be incurred in the third quarter if the price does not recover. Cost of revenues increased $3.8 million (46%) (from $8.2 million in the first six months of 1996 to $12.0 million in the first six months of 1997) primarily due to the 40.5% increase in production in 1997, partially offset by lower unit production costs. Unit production costs decreased $.75 (12.3%) to $5.34 primarily due to the 40.5% increase in silver production (1.7 million ounces produced from 83,667 tons at 21.08 ounces per ton in 1997 versus 1.2 million ounces from 58,317 tons at 21.46 ounces per ton in 1996). Depreciation, depletion and amortization increased by approximately $501 thousand as a result of increased production figures in the 1997 period. Interest income decreased by $201 thousand due to lower average invested cash balances. Interest and debt expense increased $1.1 million due to the Company's Notes Offering completed in March, 1996. See Note 4 Long-term Debt.) 8 9 INDEX TO EXHIBITS
EXHIBIT DESCRIPTION ------- ----------- 27 Financial Data Schedule.
EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AT JUNE 30, 1997 (UNAUDITED) AND THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 7,157 0 7,277 0 2,598 20,197 142,261 74,448 93,088 5,331 26,494 0 0 2,597 48,094 93,088 11,312 11,126 11,964 14,486 4,410 0 2,743 (12,913) 0 (12,913) 0 0 0 (12,913) (0.05) (0.05)
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