SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) | ||
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| For Quarter Ended March 31, 2003 Commission File number 000-32665 | ||
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| OGLEBAY NORTON COMPANY | ||
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| (Exact name of registrant as specified in its charter) | ||
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| Ohio |
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34-1888342 |
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| (State or other jurisdiction of incorporation or organization) |
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(I.R.S. employer identification no.) |
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| North Point Tower, 1001 Lakeside Ave., 15th Floor, Cleveland, Ohio |
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44114-1151 |
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| (Address of principal executive offices) |
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(Zip Code) |
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| Registrant’s telephone number, including area code 216 861-3300 | ||
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| N/A | ||
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| 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 o |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
| Yes o |
No x |
| Common shares outstanding at May 8, 2003: |
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5,003,051 |
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
INDEX
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Page Number | |
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| Item 1 |
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3 | |
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Condensed Consolidated Balance Sheet (Unaudited) - |
4 |
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5 | |
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6 -14 | |
| Item 2 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
15-23 |
| Item 3 |
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24 | |
| Item 4 |
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25 | |
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| Item 1 |
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26 | |
| Item 2 |
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26 | |
| Item 3 |
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26 | |
| Item 4 |
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26-27 | |
| Item 5 |
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27 | |
| Item 6 |
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27 | |
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| 28-30 | ||
-2-
Part I. Item 1. FINANCIAL INFORMATION
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(UNAUDITED)
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Three Months Ended |
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2003 |
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2002 |
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| NET SALES AND OPERATING REVENUES |
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$ |
62,884 |
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$ |
62,355 |
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| COSTS AND EXPENSES |
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| Cost of goods sold and operating expenses |
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49,544 |
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47,306 |
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| Depreciation, depletion, amortization and accretion |
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5,473 |
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4,717 |
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| General, administrative and selling expenses |
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10,075 |
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8,791 |
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65,092 |
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60,814 |
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| OPERATING (LOSS) INCOME |
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(2,208 |
) |
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1,541 |
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| Gain on disposition of assets |
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63 |
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134 |
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| Interest expense |
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(13,281 |
) |
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(10,072 |
) |
| Other expense, net |
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(1,591 |
) |
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(154 |
) |
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| LOSS BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE |
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(17,017 |
) |
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(8,551 |
) |
| INCOME TAX BENEFIT |
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(7,358 |
) |
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(3,078 |
) |
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| LOSS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE |
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(9,659 |
) |
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(5,473 |
) |
| CUMULATIVE EFFECT OF ACCOUNTING CHANGE FOR ASSET RETIREMENT OBLIGATIONS (net of tax benefit of $889) |
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(1,391 |
) |
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— |
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| NET LOSS |
|
$ |
(11,050 |
) |
$ |
(5,473 |
) |
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| PER SHARE AMOUNTS--BASIC AND ASSUMING DILUTION: |
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| Loss before cumulative effect of accounting change |
|
$ |
(1.90 |
) |
$ |
(1.09 |
) |
| Cumulative effect of accounting change for asset retirement obligations (net of tax benefit of $0.18) |
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(0.27 |
) |
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— |
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| Net loss per share--basic and asuming dilution |
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$ |
(2.17 |
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$ |
(1.09 |
) |
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See notes to condensed consolidated financial statements.
-3-
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except per share amounts)
ASSETS
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(UNAUDITED) |
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December 31 |
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| CURRENT ASSETS |
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| Cash and cash equivalents |
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$ |
— |
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$ |
756 |
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| Accounts receivable, net of reserve for doubtful accounts (2003 - $3,998; 2002 - $3,866) |
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37,217 |
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55,675 |
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| Inventories |
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| Raw materials and finished products |
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40,828 |
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39,273 |
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| Operating supplies |
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14,081 |
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14,746 |
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54,909 |
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54,019 |
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| Deferred income taxes |
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3,951 |
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3,951 |
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| Prepaid expenses and other current assets |
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26,788 |
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8,915 |
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| TOTAL CURRENT ASSETS |
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122,865 |
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123,316 |
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| PROPERTY AND EQUIPMENT |
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753,385 |
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732,421 |
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| Less allowances for depreciation, depletion and amortization |
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306,563 |
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295,163 |
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446,822 |
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437,258 |
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| GOODWILL, net of accumulated amortization ($11,093 in 2003 and 2002) |
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77,039 |
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73,044 |
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| PREPAID PENSION COSTS |
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37,143 |
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37,695 |
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| OTHER ASSETS |
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15,474 |
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16,154 |
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| TOTAL ASSETS |
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$ |
699,343 |
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$ |
687,467 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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(UNAUDITED) |
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December 31 |
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| CURRENT LIABILITIES |
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| Current portion of long-term debt |
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$ |
248,599 |
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$ |
2,343 |
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| Accounts payable |
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22,755 |
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24,799 |
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| Payrolls and other accrued compensation |
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6,960 |
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9,374 |
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| Accrued expenses |
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12,647 |
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16,356 |
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| Accrued interest expense |
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8,109 |
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10,155 |
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| Income taxes payable |
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5,867 |
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5,887 |
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| TOTAL CURRENT LIABILITIES |
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304,937 |
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68,914 |
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| LONG-TERM DEBT, less current portion |
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178,713 |
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393,005 |
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| POSTRETIREMENT BENEFITS OBLIGATIONS |
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48,605 |
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47,808 |
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| OTHER LONG-TERM LIABILITIES |
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40,820 |
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35,470 |
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| DEFERRED INCOME TAXES |
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19,997 |
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26,769 |
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| STOCKHOLDERS’ EQUITY |
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| Preferred stock, authorized 5,000 shares |
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— |
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— |
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| Common stock, par value $1 per share, authorized 30,000 shares; issued 7,253 shares |
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7,253 |
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7,253 |
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| Additional capital |
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9,768 |
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9,727 |
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| Retained earnings |
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128,217 |
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139,267 |
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| Accumulated other comprehensive loss |
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(8,098 |
) |
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(9,533 |
) |
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137,140 |
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146,714 |
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| Treasury stock, at cost - 2,250 and 2,275 shares at respective dates |
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(30,869 |
) |
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(31,213 |
) |
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| TOTAL STOCKHOLDERS’ EQUITY |
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106,271 |
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115,501 |
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| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
699,343 |
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$ |
687,467 |
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See notes to condensed consolidated financial statements.
-4-
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(UNAUDITED)
|
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Three Months Ended |
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|
2003 |
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2002 |
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| OPERATING ACTIVITIES |
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| Net loss |
|
$ |
(11,050 |
) |
$ |
(5,473 |
) |
| Adjustments to reconcile net loss to net cash used for operating activities: |
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| Cumulative effect of accounting change for asset retirement obligations, net of taxes |
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1,391 |
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— |
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| Depreciation, depletion, amortization and accretion |
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5,473 |
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4,717 |
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| Deferred vessel costs |
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(5,564 |
) |
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(4,919 |
) |
| Deferred winter maintenance costs |
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(9,936 |
) |
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(7,959 |
) |
| Deferred income taxes |
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(6,472 |
) |
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(3,085 |
) |
| Restructuring, asset impairments and early retirement programs |
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(420 |
) |
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(693 |
) |
| Gain on disposition of assets |
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(63 |
) |
|
(134 |
) |
| Decrease (increase) in prepaid pension costs |
|
|
552 |
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(133 |
) |
| Decrease in accounts receivable |
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19,546 |
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8,586 |
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| Decrease in inventories |
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3,171 |
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2,549 |
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| Decrease in accounts payable |
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(4,829 |
) |
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(1,518 |
) |
| Decrease in payrolls and other accrued compensation |
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(2,414 |
) |
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(1,451 |
) |
| Decrease in accrued expenses |
|
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(3,415 |
) |
|
(4,075 |
) |
| Decrease in accrued interest |
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(2,046 |
) |
|
(2,852 |
) |
| (Decrease) increase in income taxes payable |
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(20 |
) |
|
997 |
|
| Other operating activities |
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|
1,039 |
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(215 |
) |
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| NET CASH USED FOR OPERATING ACTIVITIES |
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(15,057 |
) |
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(15,658 |
) |
| INVESTING ACTIVITIES |
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| Capital expenditures |
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(6,335 |
) |
|
(5,851 |
) |
| Acquisition of Erie Sand and Gravel Company |
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|
(6,831 |
) |
|
— |
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| Proceeds from the disposition of assets |
|
|
123 |
|
|
— |
|
|
|
|
|
|
|
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| NET CASH USED FOR INVESTING ACTIVITIES |
|
|
(13,043 |
) |
|
(5,851 |
) |
| FINANCING ACTIVITIES |
|
|
|
|
|
|
|
| Repayments on debt |
|
|
(38,805 |
) |
|
(20,925 |
) |
| Additional debt |
|
|
66,321 |
|
|
40,155 |
|
| Other financing activities |
|
|
(172 |
) |
|
(28 |
) |
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| NET CASH PROVIDED BY FINANCING ACTIVITIES |
|
|
27,344 |
|
|
19,202 |
|
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| Decrease in cash and cash equivalents |
|
|
(756 |
) |
|
(2,307 |
) |
| CASH AND CASH EQUIVALENTS, JANUARY 1 |
|
|
756 |
|
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