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Table of Contents
 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
 
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For Quarter Ended September 30, 2002 Commission File number 000-25651
 
OGLEBAY NORTON COMPANY

(Exact name of registrant as specified in its charter)
 
Ohio

 
34-1888342

(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. employer
identification no.)
 
1100 Superior Avenue Cleveland, Ohio

 
44114-2598

(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code 216 861-3300
 
None

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, and (2) has been subject to such filing requirements for the past 90 days.
 
Yes x                                                                  No ¨
 
Common shares outstanding at November 14, 2002:
  
4,978,051
    


Table of Contents
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
INDEX
 
PART I. FINANCIAL INFORMATION
  
Page Number

Item 1
    
  
3
  
4
  
5
  
6-14
Item 2
    
  
15-27
Item 3
    
  
28
Item 4
    
  
29
PART II. OTHER INFORMATION
    
Item 1
    
  
30
Item 2
    
  
30
Item 3
    
  
30
Item 4
    
  
30
Item 5
    
  
30
Item 6
    
  
30
  
31-33

-2-


Table of Contents
 
Part I. Item 1. FINANCIAL INFORMATION
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(UNAUDITED)
 
    
Three Months Ended September 30

    
Nine Months Ended September 30

 
    
2002

    
2001

    
2002

    
2001

 
NET SALES AND OPERATING REVENUES
  
$
123,653
 
  
$
120,107
 
  
$
298,600
 
  
$
305,386
 
COSTS AND EXPENSES
                                   
Cost of goods sold and operating expenses
  
 
89,745
 
  
 
89,254
 
  
 
215,874
 
  
 
225,335
 
Depreciation, depletion and amortization
  
 
10,562
 
  
 
10,572
 
  
 
24,934
 
  
 
26,327
 
General, administrative and selling expenses
  
 
8,889
 
  
 
9,741
 
  
 
26,331
 
  
 
26,239
 
Provision for restructuring and early retirement programs
  
 
-0-
 
  
 
-0-
 
  
 
-0-
 
  
 
4,123
 
    


  


  


  


    
 
109,196
 
  
 
109,567
 
  
 
267,139
 
  
 
282,024
 
    


  


  


  


OPERATING INCOME
  
 
14,457
 
  
 
10,540
 
  
 
31,461
 
  
 
23,362
 
(Loss) gain on disposition of assets
  
 
(17
)
  
 
25
 
  
 
55
 
  
 
139
 
Interest expense
  
 
(10,618
)
  
 
(9,988
)
  
 
(31,109
)
  
 
(30,281
)
Other expense, net
  
 
(313
)
  
 
(203
)
  
 
(739
)
  
 
(6,092
)
    


  


  


  


INCOME (LOSS) BEFORE INCOME TAXES
  
 
3,509
 
  
 
374
 
  
 
(332
)
  
 
(12,872
)
INCOME TAXES (BENEFIT)
  
 
1,494
 
  
 
147
 
  
 
(406
)
  
 
(5,020
)
    


  


  


  


NET INCOME (LOSS)
  
$
2,015
 
  
$
227
 
  
$
74
 
  
$
(7,852
)
    


  


  


  


NET INCOME (LOSS) PER SHARE—BASIC AND ASSUMING DILUTION
  
$
0.40
 
  
$
0.05
 
  
$
0.01
 
  
$
(1.57
)
    


  


  


  


DIVIDENDS PER SHARE OF COMMON STOCK
  
$
-0-
 
  
$
0.20
 
  
$
-0-
 
  
$
0.60
 
    


  


  


  


 
See notes to condensed consolidated financial statements.

-3-


Table of Contents
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except per share amounts)
 
ASSETS
    
(UNAUDITED)
        
    
September 30 2002

    
December 31 2001

 
CURRENT ASSETS
                 
Cash and cash equivalents
  
$
-0-
 
  
$
2,307
 
Accounts receivable, net of reserve for doubtful accounts (2002 - $3,977; 2001 - $3,600)
  
 
64,920
 
  
 
46,477
 
Inventories
                 
Raw materials and finished products
  
 
36,594
 
  
 
34,578
 
Operating supplies
  
 
14,333
 
  
 
14,018
 
    


  


    
 
50,927
 
  
 
48,596
 
Deferred income taxes
  
 
4,948
 
  
 
5,236
 
Prepaid expenses
  
 
13,543
 
  
 
6,565
 
    


  


TOTAL CURRENT ASSETS
  
 
134,338
 
  
 
109,181
 
PROPERTY AND EQUIPMENT
  
 
729,171
 
  
 
716,301
 
Less allowances for depreciation, depletion and amortization
  
 
290,001
 
  
 
266,702
 
    


  


    
 
439,170
 
  
 
449,599
 
GOODWILL, net of accumulated amortization ($11,093 in 2002 and 2001)
  
 
73,044
 
  
 
73,044
 
PREPAID PENSION COSTS
  
 
37,581
 
  
 
36,451
 
OTHER ASSETS
  
 
12,132
 
  
 
11,874
 
    


  


TOTAL ASSETS
  
$
696,265
 
  
$
680,149
 
    


  


LIABILITIES AND STOCKHOLDERS' EQUITY
    
 
(UNAUDITED)
 
        
    
September 30 2002

    
December 31 2001

 
CURRENT LIABILITIES
                 
Current portion of long-term debt
  
$
2,499
 
  
$
2,353
 
Accounts payable
  
 
21,064
 
  
 
20,828
 
Payrolls and other accrued compensation
  
 
7,325
 
  
 
7,312
 
Accrued expenses
  
 
13,754
 
  
 
15,302
 
Accrued interest expense
  
 
7,808
 
  
 
10,353
 
Income taxes payable
  
 
6,055
 
  
 
6,055
 
    


  


TOTAL CURRENT LIABILITIES
  
 
58,505
 
  
 
62,203
 
LONG-TERM DEBT, less current portion
  
 
402,808
 
  
 
386,420
 
POSTRETIREMENT BENEFITS OBLIGATIONS
  
 
47,588
 
  
 
45,746
 
OTHER LONG-TERM LIABILITIES
  
 
30,185
 
  
 
34,587
 
DEFERRED INCOME TAXES
  
 
34,275
 
  
 
29,195
 
STOCKHOLDERS' EQUITY
                 
Common stock, par value $1 per share, authorized 30,000 shares; issued 7,253
  
 
7,253
 
  
 
7,253
 
Additional capital
  
 
9,664
 
  
 
9,460
 
Retained earnings
  
 
145,949
 
  
 
145,875
 
Accumulated other comprehensive loss
  
 
(8,749
)
  
 
(9,321
)
    


  


    
 
154,117
 
  
 
153,267
 
Treasury stock, at cost - 2,275 and 2,279 shares at respective dates
  
 
(31,213
)
  
 
(31,269
)
    


  


TOTAL STOCKHOLDERS’ EQUITY
  
 
122,904
 
  
 
121,998
 
    


  


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  
$
696,265
 
  
$
680,149
 
    


  


 
See notes to condensed consolidated financial statements.

-4-


Table of Contents
 
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
 
(UNAUDITED)
 
    
Nine Months Ended
September 30

 
    
2002

    
2001

 
OPERATING ACTIVITIES
                 
Net income (loss)
  
$
74
 
  
$
(7,852
)
Adjustments to reconcile net income (loss) to net cash (used for) provided by operating activities:
                 
Depreciation, depletion and amortization
  
 
24,934
 
  
 
26,327
 
Deferred vessel costs
  
 
(2,770
)
  
 
(2,756
)
Deferred winter maintenance costs
  
 
(3,095
)
  
 
(3,060
)
Income tax refund
  
 
6,342
 
  
 
-0-
 
Deferred income taxes
  
 
(974
)
  
 
(11,075
)
Restructuring and early retirement programs
  
 
(1,871
)
  
 
4,123
 
Provision for notes and trade receivables
  
 
377
 
  
 
4,023
 
Gain on disposition of assets
  
 
(55
)
  
 
(139
)
(Increase) decrease in prepaid pension costs
  
 
(1,130
)
  
 
1,562
 
Increase in accounts receivable
  
 
(18,820
)
  
 
(14,171
)
(Increase) decrease in inventories
  
 
(2,331
)
  
 
53
 
Increase in accounts payable
  
 
236
 
  
 
4,250
 
Increase (decrease) in payrolls and other accrued compensation
  
 
13
 
  
 
(902
)
Increase (decrease) in accrued expenses
  
 
194
 
  
 
(1,710
)
Decrease in accrued interest
  
 
(2,545
)
  
 
(2,362
)
Increase in income taxes payable
  
 
-0-
 
  
 
1,531
 
Other operating activities
  
 
(3,082
)
  
 
2,347
 
    


  


NET CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES
  
 
(4,503
)
  
 
189
 
INVESTING ACTIVITIES
                 
Capital expenditures
  
 
(15,060
)
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