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 the Quarterly Period Ended March 31, 2003
| ¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Commission File No. 1-7170
IMCO Recycling Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
75-2008280
(I.R.S. Employer Identification No.)
5215 North O’Connor Blvd., Suite 1500
Central Tower at Williams Square
Irving, Texas 75039
(Address of principal executive offices) (Zip Code)
(972) 401-7200
(Registrant’s telephone number, including area code)
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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the close of business on April 30, 2003.
Common Stock, $0.10 par value, 15,297,712
PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
IMCO RECYCLING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
| March 31, 2003 |
December 31, 2002 |
|||||||
| (unaudited) |
||||||||
| ASSETS |
||||||||
| Current Assets |
||||||||
| Cash and cash equivalents |
$ |
25,044 |
|
$ |
6,875 |
| ||
| Accounts receivable (net of allowance of $1,889 and $1,205 |
|
74,342 |
|
|
24,501 |
| ||
| Inventories |
|
61,167 |
|
|
42,730 |
| ||
| Deferred income taxes |
|
3,390 |
|
|
3,355 |
| ||
| Other current assets |
|
14,167 |
|
|
13,210 |
| ||
| Total Current Assets |
|
178,110 |
|
|
90,671 |
| ||
| Property and equipment, net |
|
214,321 |
|
|
187,451 |
| ||
| Goodwill |
|
67,961 |
|
|
51,118 |
| ||
| Investments in joint ventures |
|
1,175 |
|
|
17,467 |
| ||
| Other assets, net |
|
6,209 |
|
|
4,703 |
| ||
| $ |
467,776 |
|
$ |
351,410 |
| |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current Liabilities |
||||||||
| Accounts payable |
$ |
103,451 |
|
$ |
77,682 |
| ||
| Accrued liabilities |
|
24,538 |
|
|
18,589 |
| ||
| Notes payable |
|
9,000 |
|
|
7,420 |
| ||
| Current maturities of long-term debt |
|
136,354 |
|
|
94,075 |
| ||
| Total Current Liabilities |
|
273,343 |
|
|
197,766 |
| ||
| Long-term debt |
|
34,408 |
|
|
14,550 |
| ||
| Deferred income taxes |
|
15,754 |
|
|
10,883 |
| ||
| Other long-term liabilities |
|
25,359 |
|
|
11,347 |
| ||
| STOCKHOLDERS’ EQUITY |
||||||||
| Preferred stock; par value $.10; 8,000,000 shares authorized; none issued |
|
— |
|
|
— |
| ||
| Common stock; par value $.10; 40,000,000 shares authorized; |
|
1,714 |
|
|
1,714 |
| ||
| Additional paid-in capital |
|
103,793 |
|
|
103,958 |
| ||
| Deferred stock compensation |
|
(2,806 |
) |
|
(3,099 |
) | ||
| Retained earnings |
|
47,541 |
|
|
46,218 |
| ||
| Accumulated other comprehensive loss from foreign currency |
|
(9,342 |
) |
|
(9,830 |
) | ||
| Treasury stock, at cost; 2,039,827 shares at March 31, 2003; |
|
(21,988 |
) |
|
(22,097 |
) | ||
| Total Stockholders’ Equity |
|
118,912 |
|
|
116,864 |
| ||
| $ |
467,776 |
|
$ |
351,410 |
| |||
See Notes to Consolidated Financial Statements.
2
IMCO RECYCLING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
| For the three months ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenues |
$ |
195,083 |
|
$ |
157,901 |
| ||
| Cost of sales |
|
183,176 |
|
|
149,312 |
| ||
| Gross profits |
|
11,907 |
|
|
8,589 |
| ||
| Selling, general and administrative expense |
|
8,005 |
|
|
5,667 |
| ||
| Interest expense |
|
2,349 |
|
|
2,251 |
| ||
| Fees on receivables sale |
|
290 |
|
|
419 |
| ||
| Interest and other income |
|
67 |
|
|
(102 |
) | ||
| Equity in net earnings of affiliates |
|
(925 |
) |
|
(272 |
) | ||
| Earnings before provision for income taxes and minority interests |
|
2,121 |
|
|
626 |
| ||
| Provision for income taxes |
|
646 |
|
|
194 |
| ||
| Earnings before minority interests |
|
1,475 |
|
|
432 |
| ||
| Minority interests, net of provision for income taxes |
|
152 |
|
|
50 |
| ||
| Earnings before accounting change |
|
1,323 |
|
|
382 |
| ||
| Cumulative effect of accounting change (net of tax) for goodwill impairment |
|
— |
|
|
(58,730 |
) | ||
| Net earnings (loss) |
$ |
1,323 |
|
$ |
(58,348 |
) | ||
| Net earnings (loss) per common share: |
||||||||
| Basic before accounting change |
$ |
0.09 |
|
$ |
0.03 |
| ||
| Cumulative effect of accounting change |
$ |
— |
|
$ |
(4.01 |
) | ||
| Basic earnings (loss) per share |
$ |
0.09 |
|
$ |
(3.98 |
) | ||
| Diluted before accounting change |
$ |
0.09 |
|
$ |
0.03 |
| ||
| Cumulative effect of accounting change |
$ |
— |
|
$ |
(3.98 |
) | ||
| Diluted earnings (loss) per share |
$ |
0.09 |
|
$ |
(3.95 |
) | ||
| Weighted average shares outstanding: |
||||||||
| Basic |
|
14,502 |
|
|
14,651 |
| ||
| Diluted |
|
14,548 |
|
|
14,762 |
| ||
See Notes to Consolidated Financial Statements.
3
IMCO RECYCLING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
(in thousands)
| For the three months ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| OPERATING ACTIVITIES |
||||||||
| Earnings before accounting change |
$ |
1,323 |
|
$ |
382 |
| ||
| Depreciation and amortization |
|
6,305 |
|
|
6,094 |
| ||
| Provision for (benefit from) deferred income taxes |
|
416 |
|
|
(130 |
) | ||
| Equity in earnings of affiliates |
|
(925 |
) |
|
(272 |
) | ||
| Other non-cash charges |
|
995 |
|
|
(75 |
) | ||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
|
(10,973 |
) |
|
(6,485 |
) | ||
| Accounts receivable sold |
|
(4,400 |
) |
|
(2,200 |
) | ||
| Inventories |
|
1,081 |
|
|
1,451 |
| ||
| Other current assets |
|
613 |
|
|
(4,409 |
) | ||
| Accounts payable and accrued liabilities |
|
(3,200 |
) |
|
7,631 |
| ||
| Net cash from (used by) operating activities |
|
(8,765 |
) |
|
1,987 |
| ||
| INVESTING ACTIVITIES |
||||||||
| Payments for property and equipment |
|
(2,392 |
) |
|
(1,310 |
) | ||
| Redemption of shares by VAW-IMCO, net of cash acquired |
|
15,669 |
|
|
— |
| ||
| Other |
|
121 |
|
|
2,524 |
| ||
| Net cash from investing activities |
|
13,398 |
|
|
1,214 |
| ||
| FINANCING ACTIVITIES |
||||||||
| Net (payments of) proceeds from long-term revolving credit facility |
|
12,500 |
|
|
(3,300 |
) | ||
| Net proceeds of long-term debt |
|
1,181 |
|
|
— |
| ||
| Other |
|
(93 |
) |
|
78 |
| ||
| Net cash from (used by) financing activities |
|
13,588 |
|
|
(3,222 |
) | ||
| Effect of exchange rate differences on cash and cash equivalents |
|
(52 |
) |
|
47 |
| ||
| Net increase in cash and cash equivalents |
|
18,169 |
|
|
26 |
| ||
| Cash and cash equivalents at January 1 |
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