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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 September 30, 2003
 
OR
   
o
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 1-9753
___________

GEORGIA GULF CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE
(State or other jurisdiction of
incorporation or organization)
58-1563799
(I.R.S. Employer
Identification No.)
400 Perimeter Center Terrace,
Suite 595, Atlanta, Georgia
(Address of principal executive offices)
30346
(Zip code)
___________

Registrant's telephone number, including area code: (770) 395-4500

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  x  No  o

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.


 
Class
Outstanding as of
October 31, 2003
 
Common Stock, $0.01 par value
32,502,398
 
 

 
     
 

GEORGIA GULF CORPORATION FORM 10-Q
QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003
INDEX


 
Page
Numbers
 
 
 
PART I. FINANCIAL INFORMATION
 
Item 1. Financial Statements
 
Condensed Consolidated Balance Sheets as of September 30, 2003 and December 31, 2002
1
Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2003 and 2002
2
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 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
17
Item 3. Quantitative and Qualitative Disclosures About Market Risk
21
Item 4. Controls and Procedures
21
PART II. OTHER INFORMATION
 
Item 1. Legal Proceedings
22
Item 5. Other Information
22
Item 6. Exhibits and Reports on Form 8-K
23
 SIGNATURES

     25

 
 
     
 
 
PART I. FINANCIAL INFORMATION.

Item 1. Financial Statements.

GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

 
  
September 30,
2003
December 31,
2002
   
 
 
 
    
 
    
 
  
ASSETS
   
 
    
 
  
Cash and cash equivalents
 
$
5,660
 
$
8,019
 
Receivables, net of allowance for doubtful accounts of $1,208 in 2003 and $1,785 in 2002
   
102,484
   
59,603
 
Inventories
   
110,526
   
114,575
 
Prepaid expenses
   
7,692
   
10,393
 
Deferred income taxes
   
6,500
   
5,657
 
   
 
 
Total current assets
   
232,862
   
198,247
 
Property, plant and equipment, net
   
491,774
   
521,326
 
Goodwill
   
77,720
   
77,720
 
Other assets
   
77,743
   
78,266
 
   
 
 
Total assets
 
$
880,099
 
$
875,559
 
   
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
   
 
    
 
  
Current portion of long-term debt
 
$
600
 
$
600
 
Accounts payable
   
104,951
   
107,943
 
Interest payable
   
12,152
   
4,650
 
Accrued compensation
   
10,453
   
14,325
 
Other accrued liabilities
   
15,069
   
12,733
 
   
 
 
Total current liabilities
   
143,225
   
140,251
 
Long-term debt, net of current portion
   
468,936
   
476,386
 
Deferred income taxes
   
125,507
   
126,250
 
Other non-current liabilities
   
7,519
   
6,872
 
Stockholders' equity
   
134,912
   
125,800
 
   
 
 
Total liabilities and stockholders' equity
 
$
880,099
 
$
875,559
 
   
 
 
 
Common shares outstanding
   
32,478
   
32,319
 

 
See notes to condensed consolidated financial statements.

 
  1  
 

GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)

 
  
Three Months Ended
September 30,
Nine Months Ended
September 30,
   
 
  
2003
2002
2003
2002
   
 		  
  		  
 		  
 		  
 
    
 
    
 
    
 
    
 
  
Net sales
 
$
348,832
 
$
342,594
 
$
1,071,960
 
$
911,984
 
Operating costs and expenses
   
 
    
 
    
 
    
 
  
Cost of sales
   
317,808
   
289,809
   
984,860
   
805,988
 
Selling, general and administrative expenses
   
9,279
   
13,040
   
35,232
   
33,574
 
   
 
 
 
 
Total operating costs and expenses
   
327,087
   
302,849
   
1,020,092
   
839,562
 
   
 
 
 
 
Operating income
   
21,745
   
39,745
   
51,868
   
72,422
 
Interest expense, net
   
(9,676
)
 
(13,082
)
 
(29,232
)
 
(38,829
)
   
 
 
 
 
Income before income taxes
   
12,069
   
26,663
   
22,636
   
33,593
 
Provision for income taxes
   
4,343
   
9,597
   
8,145
   
12,091
 
   
 
 
 
 
Net income
 
$
7,726
 
$
17,066
 
$
14,491
 
$
21,502
 
   
 
 
 
 
Earnings per share:
   
 
    
 
    
 
    
 
  
Basic
 
$
0.24
 
$
0.53
 
$
0.45
 
$
0.67
 
Diluted
 
$
0.24
 
$
0.53
 
$
0.45
 
$
0.67
 
Weighted average common shares:
   
 
    
 
    
 
    
 
  
Basic
   
32,263
   
32,009
   
32,235
   
31,974
 
Diluted
   
32,469
   
32,278
   
32,427
   
32,220
 


See notes to condensed consolidated financial statements.

 
  2  
 

GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

 
  
Nine Months Ended
September 30,
   
 
  
2003
2002
   
 
 
Cash flows from operating activities:
   
 
    
 
  
Net income
 
$
14,491
 
$
21,502
 
Adjustments to reconcile net income to net cash provided by operating activities:
   
 
    
 
  
Depreciation and amortization
   
48,039
   
51,700
 
Provision (benefit) for (from) deferred income taxes
   
(1,586
)
 
7,360
 
Tax benefit related to stock plans
   
631
   
513
 
Stock based compensation
   
1,163
   
437
 
Change in operating assets, liabilities and other
   
(35,163
)
 
(16,754
)
   
 
 
Net cash provided by operating activities
   
27,575
   
64,758
 
   
 
 
Cash flows used in investing activities:
   
 
    
 
  
Capital expenditures
   
(15,312
)
 
(13,064
)
   
 
 
Cash flows from financing activities:
   
 
    
 
  
Net change in revolving