-----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, OaraGXhJTmFCQMH//FtZyC8SaaxQDJ2ckUaryXkEhOtGEDmv+XhZFUWNg+Bzl8ba demn9atBQbdk1gd9M9ZgNw== 0000950129-97-001959.txt : 19970514 0000950129-97-001959.hdr.sgml : 19970514 ACCESSION NUMBER: 0000950129-97-001959 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970513 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER AMERICAS ACQUISITION CORP CENTRAL INDEX KEY: 0000944649 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 061420850 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-91702 FILM NUMBER: 97602971 BUSINESS ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: SUITE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 MAIL ADDRESS: STREET 1: 700 LOUISIANA ST STREET 2: SUITE 4200 CITY: HOUSTON STATE: TX ZIP: 77002 10-Q 1 PIONEER AMERICAS ACQUISITION CORP. - 03/31/97 1 UNITED STATES 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 MARCH 31, 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 33-98828 PIONEER AMERICAS ACQUISITION CORP. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 06-1420850 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 4200 NATIONSBANK CENTER, 700 LOUISIANA STREET, HOUSTON, TEXAS 77002 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (713) 225-3831 (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 | | On May 2, 1997, there were outstanding 1,000 shares of the Registrant's Common Stock, $.01 par value. All of such shares are owned by Pioneer Companies, Inc. The Registrant meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q, and is therefore filing this form with the reduced disclosure format permitted by General Instruction (H)(2) of Form 10-Q. 2 TABLE OF CONTENTS PART I--FINANCIAL INFORMATION
Page ---- Item 1. Consolidated Financial Statements Consolidated Balance Sheets--March 31, 1997 and December 31, 1996 3 Consolidated Statements of Operations--Three Months Ended March 31, 1997 and 1996 4 Consolidated Statements of Cash Flows--Three Months Ended March 31, 1997 and 1996 5 Notes to Consolidated Financial Statements 6 PART II--OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 9
2 3 PART I --FINANCIAL INFORMATION PIONEER AMERICAS ACQUISITION CORP. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
MARCH 31, DECEMBER 31, 1997 1996 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 14,640 $ 14,417 Accounts receivable, less allowance for doubtful accounts of $1,440 at March 31, 1997 and $1,311 at December 31, 1996 18,438 18,830 Due from parent 2,840 2,547 Inventories 8,896 6,247 Prepaid expenses 806 1,156 ----------- ----------- Total current assets 45,620 43,197 Property, plant and equipment: Land 3,735 3,735 Buildings and improvements 17,218 17,062 Machinery and equipment 73,194 71,704 Cylinders and tanks 4,583 4,540 Construction in progress 12,501 11,871 ----------- ----------- 111,231 108,912 Less accumulated depreciation (19,007) (16,429) ----------- ----------- 92,224 92,483 Investment in and advances to unconsolidated subsidiary 28,553 28,586 Other assets, net of accumulated amortization of $2,803 at March 31, 1997 and $2,458 at December 31, 1996 19,268 19,621 Excess cost over fair value of net assets acquired, net of accumulated amortization of $8,749 at March 31, 1997 and $7,556 at December 31, 1996 105,930 107,123 ----------- ----------- Total assets $ 291,595 $ 291,010 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 17,677 $ 17,221 Accrued liabilities 21,614 19,276 Returnable deposits 3,175 3,238 Current portion of long-term debt 128 128 ----------- ----------- Total current liabilities 42,594 39,863 Long-term debt 141,629 141,629 Returnable deposits 3,272 3,272 Accrued pension and other employee benefits 14,555 14,100 Other long-term liabilities 17,112 17,823 Commitments and contingencies Stockholder's equity: Common stock, $.01 par value, authorized 1,000 shares, issued and outstanding 1,000 shares 1 1 Additional paid-in capital 61,124 61,124 Retained earnings 11,308 13,198 ----------- ----------- Total stockholders' equity 72,433 74,323 ----------- ----------- Total liabilities and stockholders' equity $ 291,595 $ 291,010 =========== ===========
See notes to consolidated financial statements. 3 4 PIONEER AMERICAS ACQUISITION CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS)
THREE MONTHS ENDED MARCH 31, ------------------------ 1997 1996 ---------- ---------- Revenues $ 38,743 $ 44,292 Cost of sales 29,003 30,797 ---------- ---------- Gross profit 9,740 13,495 Selling, general and administrative expense 6,170 6,090 ---------- ---------- Operating income 3,570 7,405 Equity in net loss of unconsolidated subsidiary (1,055) (110) Interest expense, net (4,458) (3,944) Other income, net 231 89 ---------- ---------- Income (loss) before taxes (1,712) 3,440 Income tax provision 178 2,028 ---------- ---------- Net income (loss) $ (1,890) $ 1,412 ========== ==========
See notes to consolidated financial statements. 4 5 PIONEER AMERICAS ACQUISITION CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
THREE MONTHS ENDED MARCH 31, ------------------------ 1997 1996 ---------- ---------- Operating activities: Net income (loss) $ (1,890) $ 1,411 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 4,080 4,217 Equity in net loss of unconsolidated subsidiaries 1,055 110 Net change in deferred taxes (42) 1,425 Net effect of changes in operating assets and liabilities (net of acquisitions) 379 (2,088) ---------- ---------- Net cash flows from operating activities 3,582 5,075 ---------- ---------- Investing activities: Investment in and advances to unconsolidated subsidiary (1,022) (600) Capital expenditures (2,337) (3,907) ---------- ---------- Net cash flows from investing activities (3,359) (4,507) ---------- ---------- Net increase in cash 223 568 Cash acquired in purchase -- 505 Cash at beginning of period 14,417 11,218 ---------- ---------- Cash at end of period $ 14,640 $ 12,291 ========== ==========
See notes to consolidated financial statements. 5 6 PIONEER AMERICAS ACQUISITION CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION AND BASIS OF PRESENTATION The consolidated balance sheet as of March 31, 1997 and the consolidated statements of operations and cash flows for all periods presented are unaudited and reflect all adjustments, consisting of normal recurring items, which management considers necessary for a fair presentation. Operating results for the first three months of 1997 are not necessarily indicative of results to be expected for the year ending December 31, 1997. The consolidated financial statements include the accounts of Pioneer Americas Acquisition Corp. and its consolidated subsidiaries (collectively referred to as the "Company"). All significant intercompany balances and transactions have been eliminated in consolidation. All dollar amounts in the tabulations in the notes to the financial statements are stated in thousands of dollars unless otherwise indicated. The consolidated balance sheet at December 31, 1996 is derived from the December 31, 1996 audited consolidated financial statements, but does not include all disclosures required by generally accepted accounting principles, since certain information and disclosures normally included in the notes to the financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission. The accompanying unaudited financial statements should be read in conjunction with the financial statements contained in the Annual Report on Form 10-K for the year ended December 31, 1996. 2. SUPPLEMENTAL CASH FLOW INFORMATION Net effect of changes in operating assets and liabilities (net of acquisitions) are as follows:
THREE MONTHS ENDED MARCH 31, ---------------------- 1997 1996 --------- --------- Accounts receivable $ 392 $ 1,584 Due from parent (293) (766) Inventories (2,649) (682) Prepaid expenses 350 1,659 Other assets 98 (121) Accounts payable 456 (7,971) Accrued liabilities 2,345 295 Returnable deposits (63) (120) Other long-term liabilities (256) 4,034 --------- --------- Net change in operating accounts $ 379 $ (2,088) ========= =========
Following is supplemental cash information:
THREE MONTHS ENDED MARCH 31, --------------------- 1997 1996 --------- --------- Supplemental disclosures of cash flow information: Cash payments for: Interest $ 605 $ 231 Income taxes 135 2,150 Acquisition of KWT, Inc. during the period: Cash paid for acquisition $ 1,572 Long-term debt issued 8,017 Liabilities assumed 2,167 --------- Fair value of assets acquired $ 11,756 =========
Other non-cash items included in the consolidated financial statements include an increase in shareholder's equity of $1.4 million for the three months ended March 31, 1996 due to the recognition of the net operating loss carryforward. 6 7 3. INVENTORIES Inventories consist of the following:
MARCH 31, DECEMBER 31, --------- ------------ 1997 1996 --------- --------- Raw materials, supplies and parts $ 7,914 $ 7,512 Finished goods and work-in-process 4,407 2,668 Inventories under exchange agreements (3,425) (3,933) --------- --------- $ 8,896 $ 6,247 ========= =========
4. COMMITMENTS AND CONTINGENCIES The Company is subject to various legal proceedings and potential claims arising in the ordinary course of its business. In the opinion of management, the Company has adequate legal defenses and/or insurance coverage with respect to these matters and management does not believe that they will materially affect the Company's operations or financial position. 5. RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, ---------------------- 1997 1996 --------- --------- Revenues $ 38,743 $ 44,292 Cost of sales 29,003 30,797 --------- --------- Gross profit 9,740 13,495 Selling, general and administrative expense 6,170 6,090 --------- --------- Operating income 3,570 7,405 Equity in net loss of unconsolidated subsidiary (1,055) (110) Interest expense, net (4,458) (3,944) Other income, net 231 89 --------- --------- Income (loss) before taxes (1,712) 3,440 Income tax provision 178 2,028 --------- --------- Net income (loss) $ (1,890) $ 1,412 ========= =========
Revenues Revenues decreased by $5.5 million or approximately 13% to $38.7 million for the three months ended March 31, 1997. Electrochemical unit ("ECU") prices decreased approximately 3% while caustic soda and chlorine sales volumes decreased by 21% and 3%, respectively. The decrease in caustic soda sales was due to the weather-related delays in Mississippi River barge shipments. Revenues for All-Pure Chemical Co. ("All-Pure") increased 13% or $1.2 million in the first quarter of 1997 compared to the same quarter a year ago. This increase was due to the revenues associated with the acquisition of T.C. Products, Inc. which the Company acquired in the second quarter of 1996. Cost of Sales Cost of sales decreased by $1.8 million or almost 6% to $29.0 million for the three months ended March 31, 1997. This decrease was the result of lower cost of sales for caustic soda and chlorine due to lower sales volumes, partially offset by the acquisitions mentioned above. Gross Profit Gross profit margin decreased from 30% during the first quarter of 1996 to approximately 25% during the first quarter of 1997. This decrease was a result of lower ECU prices described above along with somewhat higher ECU manufacturing costs. Equity in Net Loss of Unconsolidated Subsidiary Equity in net loss of unconsolidated subsidiary increased by approximately $0.9 million due to losses sustained by the unconsolidated subsidiary during the first quarter of 1997. These losses were attributable to decreased gross margins as a result of higher raw material costs. 7 8 Income (Loss) Before Taxes As a result of the above, income (loss) before income taxes decreased $5.1 million to a loss of $1.7 million for the three months ended March 31, 1997 from income of $3.4 million for the three months ended March 31, 1996. 8 9 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27 Financial Data Schedule. (b) Reports on Form 8-K The Company did not file any reports on Form 8-K during the quarter ended March 31, 1997. 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 hereunto duly authorized. PIONEER AMERICAS ACQUISITION CORP. May 13, 1997 By: /s/ Philip J. Ablove --------------------------------- Philip J. Ablove Vice President and Chief Financial Officer 9 10 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 27 - Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 14,640 0 19,878 (1,440) 8,896 45,620 111,231 (19,007) 291,595 42,594 141,629 0 0 1 72,432 291,595 38,743 38,743 29,003 29,003 0 0 4,458 (1,712) 178 (1,890) 0 0 0 (1,890) (1,890) (1,890)
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