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United States
Securities and Exchange Commission
Washington, D.C. 20549

FORM 10-Q

[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly period ended: September 30, 2004

OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURTIES EXCHANGE ACT OF 1934
For the transition period from_______________ to________________

Commission File Number 1-5558

Katy Industries, Inc.
(Exact name of registrant as specified in its charter)

Delaware
  
75-1277589
(State of Incorporation)
  
(I.R.S. Employer Identification No.)

765 Straits Turnpike, Suite 2000, Middlebury, Connecticut 06762
(Address of Principal Executive Offices) (Zip Code)
 
Registrant's telephone number, including area code: (203)598-0397

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 o
  
 
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
 
 
Yes o
  
No x
  
 
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 November 1, 2004
Common Stock, $1 Par Value
  
7,870,377
 
 
     
 
KATY INDUSTRIES, INC.
FORM 10-Q
September 30, 2004
 
INDEX

       
     
Page
PART I
FINANCIAL INFORMATION
  
       
 
Item 1.
Financial Statements:
  
       
     
   
September 30, 2004 and December 31, 2003 (unaudited)
2,3
       
     
   
Three Months and Nine Months Ended
 
   
September 30, 2004 and 2003 (unaudited)
4
       
     
   
Nine Months Ended September 30, 2004 and 2003 (unaudited)
5
       
   
6
       
 
Item 2.
  
   
23
       
 
Item 3.
39
       
 
Item 4.
39
       
       
PART II
OTHER INFORMATION
  
       
 
Item 1.
40
       
 
Item 2.
40
       
 
Item 6.
40
       
 
41
       
 
42-45
     

 
  1   
 
PART I FINANCIAL INFORMATION

Item 1. Financial Statements
 
KATY INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
(Unaudited)

ASSETS

   
September 30,
  
December 31,
 
2004
2003
CURRENT ASSETS:
            
             
Cash and cash equivalents
 
$
8,626
 
$
6,748
Accounts receivable, net
   
76,185
   
65,197
Inventories, net
    
72,928
   
53,545
Other current assets
    
2,980
   
1,658
             
Total current assets
    
160,719
   
127,148
             
             
OTHER ASSETS:
            
             
Goodwill
    
10,215
   
10,215
Intangibles, net
    
21,280
   
22,399
Other
    
10,244
   
10,352
             
Total other assets
    
41,739
   
42,966
             
             
PROPERTY AND EQUIPMENT
            
Land and improvements
    
1,805
   
3,196
Buildings and improvements
    
14,269
   
17,198
Machinery and equipment
    
137,171
   
129,240
             
     
153,245
   
149,634
Less - Accumulated depreciation
    
(85,001
)
  
(78,040
             
Property and equipment, net
    
68,244
   
71,594
             
Total assets
  
$
270,702
 
$
241,708
             
See Notes to Condensed Consolidated Financial Statements.
           
             

 
   2  
 
KATY INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars, Except Share Data)
(Unaudited)

LIABILITIES AND STOCKHOLDERS’ EQUITY

   
September 30,
December 31,
  
   
2004
2003
  
CURRENT LIABILITIES:
              
               
Accounts payable
  
$
42,917
 
$
37,259
 
Accrued compensation
    
5,383
   
6,212
 
Accrued expenses
    
41,072
   
40,238
 
Current maturities of long-term debt
    
2,857
   
2,857
 
Revolving credit agreement
    
48,507
   
36,000
 
               
Total current liabilities
    
140,736
   
122,566
 
               
LONG-TERM DEBT, less current maturities
    
15,714
   
806
 
               
OTHER LIABILITIES
    
13,688
   
16,044
 
               
Total liabilities
    
170,138
   
139,416
 
               
COMMITMENTS AND CONTINGENCIES (Notes 10 and 12)
    
-
   
-
 
               
STOCKHOLDERS
              
15% Convertible Preferred Stock, $100 par value, authorized
              
1,200,000 shares, issued and outstanding 1,064,613 and 925,750 shares,
             
respectively, liquidation value $109,152 and $98,396, respectively
    
104,253
   
93,507
 
Common stock, $1 par value authorized 35,000,000 shares,
              
issued 9,822,204 shares
    
9,822
   
9,822
 
Additional paid-in capital
    
29,686
   
40,441
 
Accumulated other comprehensive income
   
2,913
   
2,387
 
Accumulated deficit
    
(23,325
)
  
(21,137
)
Treasury stock, at cost, 1,951,827 and 1,941,327 shares, respectively
    
(22,785
)
  
(22,728
)
               
Total stockholders' equity
    
100,564
   
102,292
 
               
Total liabilities and stockholders' equity
  
$
270,702
 
$
241,708
 
               
See Notes to Condensed Consolidated Financial Statements.