UNITED STATES
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 the quarterly period ended March 31, 2004
COMMISSION FILE NUMBER: 1-12881
LONE STAR TECHNOLOGIES, INC.
(A DELAWARE CORPORATION)
I.R.S. EMPLOYER IDENTIFICATION NUMBER: 75-2085454
15660 N. Dallas Parkway, Suite 500
Dallas, Texas 75248
(972) 770-6401
Indicate by a 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 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 ý No o.
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý. No o.
As of April 15, 2004, the number of shares of Common Stock outstanding at $1.00 par value per share was 28,762,692.
LONE STAR TECHNOLOGIES, INC.
INDEX
PART I - FINANCIAL INFORMATION
|
Item 1. |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
2
LONE STAR TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited; $ and shares in millions, except per share data)
|
|
|
For the Quarter Ended March 31, |
|
||||
|
|
|
2004 |
|
2003 |
|
||
|
|
|
|
|
|
|
||
|
Net revenues |
|
$ |
179.8 |
|
$ |
128.1 |
|
|
Cost of goods sold |
|
156.6 |
|
123.8 |
|
||
|
Gross profit |
|
23.2 |
|
4.3 |
|
||
|
Selling, general and administrative expenses |
|
11.1 |
|
9.6 |
|
||
|
Operating income (loss) |
|
12.1 |
|
(5.3 |
) |
||
|
Interest income |
|
0.2 |
|
0.4 |
|
||
|
Interest expense |
|
(4.2 |
) |
(3.6 |
) |
||
|
Other income |
|
0.3 |
|
1.0 |
|
||
|
Other expense |
|
(0.1 |
) |
(0.3 |
) |
||
|
Income (loss) before income tax |
|
8.3 |
|
(7.8 |
) |
||
|
Income tax expense |
|
(0.3 |
) |
(0.1 |
) |
||
|
Net income (loss) |
|
$ |
8.0 |
|
$ |
(7.9 |
) |
|
|
|
|
|
|
|
||
|
Per common share - basic: |
|
|
|
|
|
||
|
Net income (loss) available to common shareholders |
|
$ |
0.28 |
|
$ |
(0.28 |
) |
|
|
|
|
|
|
|
||
|
Per common share - diluted: |
|
|
|
|
|
||
|
Net income (loss) available to common shareholders |
|
$ |
0.28 |
|
$ |
(0.28 |
) |
|
|
|
|
|
|
|
||
|
Weighted average shares outstanding: |
|
|
|
|
|
||
|
Basic |
|
28.5 |
|
28.4 |
|
||
|
Diluted |
|
28.7 |
|
28.4 |
|
||
See Notes to Condensed Consolidated Financial Statements.
3
LONE STAR TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited; $ in millions, except share data)
|
|
|
March 31, |
|
December 31, |
|
||
|
|
|
|
|
|
|
||
|
ASSETS |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Current Assets: |
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
39.4 |
|
$ |
33.3 |
|
|
Accounts receivable, less allowances of $1.8 and $1.7, respectively |
|
99.8 |
|
71.8 |
|
||
|
Inventories |
|
134.0 |
|
152.8 |
|
||
|
Other current assets |
|
21.8 |
|
14.7 |
|
||
|
Total current assets |
|
295.0 |
|
272.6 |
|
||
|
|
|
|
|
|
|
||
|
Property, plant and equipment, net |
|
218.0 |
|
220.0 |
|
||
|
Goodwill |
|
40.9 |
|
40.9 |
|
||
|
Restricted cash |
|
32.3 |
|
32.2 |
|
||
|
Other noncurrent assets |
|
9.5 |
|
9.9 |
|
||
|
Total assets |
|
$ |
595.7 |
|
$ |
575.6 |
|
|
|
|
|
|
|
|
||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Current Liabilities: |
|
|
|
|
|
||
|
Accounts payable |
|
$ |
67.3 |
|
$ |
60.4 |
|
|
Accrued liabilities |
|
32.6 |
|
28.0 |
|
||
|
Total current liabilities |
|
99.9 |
|
88.4 |
|
||
|
|
|
|
|
|
|
||
|
Senior subordinated debt |
|
150.0 |
|
150.0 |
|
||
|
Postretirement benefit obligations |
|
44.1 |
|
44.5 |
|
||
|
Other noncurrent liabilities |
|
47.5 |
|
46.8 |
|
||
|
Total liabilities |
|
341.5 |
|
329.7 |
|
||
|
|
|
|
|
|
|
||
|
Commitments and contingencies (See Note 11) |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Shareholders’ Equity: |
|
|
|
|
|
||
|
Preferred stock, $1 par value (authorized: 10,000,000 shares, issued: none) |
|
— |
|
— |
|
||
|
Common stock, $1 par value (authorized: 80,000,000 shares, issued: 28,759,915 and 28,660,903, respectively) |
|
28.8 |
|
28.7 |
|
||
|
Capital surplus |
|
355.3 |
|
355.1 |
|
||
|
Accumulated other comprehensive loss |
|
(32.2 |
) |
(32.2 |
) |
||
|
Accumulated deficit |
|
(95.4 |
) |
(103.4 |
) |
||
|
Treasury stock, at cost (174,107 common shares) |
|
(2.3 |
) |
(2.3 |
) |
||
|
Total shareholders’ equity |
|
254.2 |
|
245.9 |
|
||
|
Total liabilities and shareholders’ equity |
|
$ |
595.7 |
|
$ |
575.6 |
|
See Notes to Condensed Consolidated Financial Statements.
4
LONE STAR TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited; $ in millions)
|
|
|
For the Quarter Ended March 31, |
|
||||
|
|
|
2004 |
|
2003 |
|
||
|
|
|
|
|
|
|
||
|
Cash flows from operating activities: |
|
|
|||||