RADNOR HOLDINGS CORP - 10-Q Quarterly Report

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 26, 2004

¨	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: 333-19495

RADNOR HOLDINGS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

23-2674715

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

Three Radnor Corporate Center, Suite 300

100 Matsonford Road, Radnor, Pennsylvania

19087

(address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: 610-341-9600

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 Securities Exchange Act of 1934). Yes ¨ No x

The number of shares outstanding of the Registrant’s common stock as of May 7, 2004:


Class		Number of Shares
Voting Common Stock; $.10 par value		600
Nonvoting Common Stock; $.10 par value		245
Class B Nonvoting Common Stock; $.01 par value		5,400

PART I—FINANCIAL INFORMATION

Item 1.

FINANCIAL STATEMENTS

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)


	March 26, 2004			December 26, 2003
Assets
Current assets:
Cash	$	602		$	6,896
Accounts receivable, net		48,426			41,441
Inventories, net		57,496			52,202
Prepaid expenses and other		11,960			11,430
Deferred tax asset		2,466			2,466

		120,950			114,435

Property, plant and equipment, at cost		291,400			290,795
Less accumulated depreciation		(95,881	)		(92,142	)

		195,519			198,653

Investments		66,097			66,606
Intangible assets		6,361			5,790
Other assets		14,444			10,811

	$	403,371		$	396,295

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	52,066		$	45,993
Accrued liabilities		20,932			26,913
Current portion of long-term debt		4,234			13,626
Current portion of capitalized lease obligations		2,103			2,324

		79,335			88,856

Long-term debt, net of current portion		257,965			237,478
Capitalized lease obligations, net of current portion		5,568			6,038
Deferred tax liability		2,293			3,552
Other non-current liabilities		3,542			3,608
Minority interest in consolidated subsidiary		48,128			48,934
Commitments and contingencies		—			—
Stockholders’ equity:
Common stock		1			1
Additional paid-in capital		19,387			19,387
Retained earnings (deficit)		(14,617	)		(14,446	)
Cumulative translation adjustment		1,769			2,887

Total stockholders’ equity		6,540			7,829

	$	403,371		$	396,295

The accompanying notes are an integral part of these condensed consolidated financial statements.

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(In thousands)

(Unaudited)


	For the three months ended
	March 26, 2004			March 28, 2003
Net sales	$	96,300		$	80,253
Cost of goods sold		77,627			63,455

Gross profit		18,673			16,798
Operating expenses:
Distribution		6,248			4,883
Selling, general and administrative		7,874			7,532
Other expenses (Note 4)		—			1,838

Income from operations		4,551			2,545
Interest, net		5,607			5,418
Income from unconsolidated affiliates		(159	)		(828	)
Other, net		190			190
Minority interest in operations of consolidated subsidiary		(806	)		—

Loss before income taxes		(281	)		(2,235	)
Provision (benefit) for income taxes:
Current		459			364
Deferred		(569	)		(1,213	)

		(110	)		(849	)

Net loss	$	(171	)	$	(1,386	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	For the three months ended
	March 26, 2004			March 28, 2003
Cash flows from operating activities:
Net loss	$	(171	)	$	(1,386	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		4,848			5,176
Deferred income taxes		(569	)		(1,213	)
Income from unconsolidated affiliates		(159	)		(828	)
Minority interest in operations of consolidated subsidiary		(806	)		—
Changes in operating assets and liabilities:
Accounts receivable, net		(7,564	)		(4,660	)
Inventories		(5,512	)		(8,888	)
Prepaid expenses and other		(559	)		(700	)
Accounts payable		6,380			1,453
Accrued liabilities and other		(7,039	)		1,151

Net cash used in operating activities		(11,151	)		(9,895	)

Cash flows from investing activities:
Capital expenditures		(2,810	)		(2,866	)
Distributions from unconsolidated affiliates		2,630			1,529
Investments in unconsolidated affiliates		(1,947	)		(1,473	)
Increase in other assets		(3,469	)		(654	)

Net cash used in investing activities		(5,596	)		(3,464	)

Cash flows from financing activities:
Proceeds from borrowings		18,462			188,236
Repayment of debt		(7,237	)		(172,527	)
Payments on capitalized lease obligations		(691	)		(283	)
Payment of financing fees		—			(4,546	)

Net cash provided by financing activities		10,534			10,880

Effect of exchange rate changes on cash		(81	)		(450	)

Net decrease in cash		(6,294	)		(2,929	)
Cash, beginning of period		6,896			4,059

Cash, end of period	$	602		$	1,130

Supplemental disclosure of cash flows information:
Cash paid during the period for interest	$	9,146		$	939

Cash paid during the period for income taxes	$	28		$	430

The accompanying notes are an integral part of these condensed consolidated financial statements.

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Summary of Operating Segments

(In thousands)

(Unaudited)


	For the three months ended
	March 26, 2004			March 28, 2003
Net Sales to Unaffiliated Customers:
Packaging	$	55,898		$	44,972
Specialty Chemicals		43,321			37,055
Corporate and Other		—			—
Transfers Between Operating Segments ⁽¹⁾		(2,919	)		(1,774	)

Consolidated	$	96,300		$	80,253

Income (Loss) From Operations:
Packaging	$	5,323		$	6,449
Specialty Chemicals		1,725			405
Corporate and Other		(2,497	)		(4,309	)

Consolidated	$	4,551		$	2,545

Income (Loss) Before Income Taxes:
Packaging	$	1,786		$	3,495
Specialty Chemicals		294			(1,019	)
Corporate and Other		(2,361	)		(4,711	)

Consolidated	$	(281	)	$	(2,235	)

⁽¹⁾	Transfers between operating segments reflect the sale of expandable polystyrene (“EPS”) from the specialty chemicals operating segment to the packaging operating segment.

RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES

Summary by Geographic Region

(In thousands)

(Unaudited)


	For the three months ended
	March 26, 2004			March 28, 2003
Net Sales to Unaffiliated Customers:
United States	$	63,727		$	53,659
Canada		9,300			9,185
Europe		26,192			19,183
Transfers Between Geographic Regions ⁽¹⁾		(2,919	)		(1,774	)

Consolidated	$	96,300		$	80,253

Income From Operations:
United States	$