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 June 30, 2004
or
| ¨ | 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 1-2376
FMC CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 94-0479804 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| 1735 Market Street Philadelphia, Pennsylvania |
19103 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: 215/299-6000
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 ACT.) YES x NO ¨
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER’S CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE
| Class |
Outstanding at July 30, 2004 | |
| Common Stock, par value $0.10 per share |
36,463,885 |
FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES
INDEX
| Page No. | ||||
| Part I - FINANCIAL INFORMATION |
||||
| Item 1. Financial Statements |
||||
| 3 | ||||
| Condensed Consolidated Balance Sheets – June 30, 2004 (unaudited) and December 31, 2003 | 4 | |||
| 5 | ||||
| Notes to Condensed Consolidated Financial Statements (unaudited) | 7 | |||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
26 | |||
| Item 3. Quantitative and Qualitative Disclosures About Market Risk |
37 | |||
| Item 4. Controls and Procedures |
37 | |||
| Part II - OTHER INFORMATION |
||||
| Item 1. Legal Proceedings |
40 | |||
| 40 | ||||
| 41 | ||||
| 42 | ||||
2
PART I - FINANCIAL INFORMATION
FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| (in Millions, Except Share and Per Share Data) |
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||
| 2004 |
2003 |
2004 |
2003 | |||||||||||
| (unaudited) | (unaudited) | |||||||||||||
| Revenue |
$ | 534.3 | $ | 510.0 | $ | 1,040.0 | $ | 944.0 | ||||||
| Costs and Expenses |
||||||||||||||
| Costs of sales and services |
377.6 | 370.7 | 755.2 | 695.9 | ||||||||||
| Selling, general and administrative expenses |
61.4 | 60.3 | 126.3 | 117.1 | ||||||||||
| Research and development expenses |
20.7 | 22.0 | 44.6 | 42.1 | ||||||||||
| Restructuring and other charges (Note 6) |
1.0 | — | 2.3 | — | ||||||||||
| Total costs and expenses |
460.7 | 453.0 | 928.4 | 855.1 | ||||||||||
| Income from continuing operations before equity in loss of affiliates, minority interests, interest expense, net and income taxes |
73.6 | 57.0 | 111.6 | 88.9 | ||||||||||
| Equity in loss of affiliates (Note 14) |
0.3 | 5.2 | 10.0 | 8.7 | ||||||||||
| Minority interests |
0.3 | 0.4 | 1.0 | 1.1 | ||||||||||
| Interest expense, net |
20.6 | 23.4 | 41.0 | 48.7 | ||||||||||
| Income from continuing operations before income taxes |
52.4 | 28.0 | 59.6 | 30.4 | ||||||||||
| Provision (benefit) for income taxes |
11.6 | 6.3 | 11.5 | 6.8 | ||||||||||
| Income from continuing operations |
40.8 | 21.7 | 48.1 | 23.6 | ||||||||||
| Discontinued operations (Note 8) |
(10.1 | ) | — | (11.9 | ) | — | ||||||||
| Net income |
$ | 30.7 | $ | 21.7 | $ | 36.2 | $ | 23.6 | ||||||
| Basic earnings per common share (Note 10) |
||||||||||||||
| Continuing operations |
$ | 1.13 | $ | 0.62 | $ | 1.34 | $ | 0.67 | ||||||
| Discontinued operations |
(0.28 | ) | — | (0.33 | ) | — | ||||||||
| Net income |
$ | 0.85 | $ | 0.62 | $ | 1.01 | $ | 0.67 | ||||||
| Diluted earnings per common share (Note 10) |
||||||||||||||
| Continuing operations |
$ | 1.09 | $ | 0.61 | $ | 1.30 | $ | 0.66 | ||||||
| Discontinued operations |
(0.27 | ) | — | (0.32 | ) | — | ||||||||
| Net income |
$ | 0.82 | $ | 0.61 | $ | 0.98 | $ | 0.66 | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| (in Millions, Except Share and Par Value Data) |
June 30, 2004 |
December 31, 2003 |
||||||
| (unaudited) | ||||||||
| ASSETS |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 100.6 | $ | 57.0 | ||||
| Restricted cash (Note 7) |
136.9 | 136.9 | ||||||
| Trade receivables, net of allowance of $8.4 at June 30, 2004 and $6.9 at December 31, 2003 |
482.9 | 478.2 | ||||||
| Inventories |
162.7 | 192.6 | ||||||
| Other current assets |
122.6 | 112.1 | ||||||
| Deferred income taxes |
29.2 | 32.9 | ||||||
| Total current assets |
1,034.9 | 1,009.7 | ||||||
| Investments (Notes 14 and 15) |
50.2 | 68.8 | ||||||
| Property, plant and equipment, net (Note 5) |
1,089.7 | 1,128.1 | ||||||
| Goodwill (Note 3) |
152.6 | 156.3 | ||||||
| Other assets |
140.2 | 143.7 | ||||||
| Deferred income taxes |
336.3 | 322.2 | ||||||
| Total assets |
$ | 2,803.9 | $ | 2,828.8 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities |
||||||||
| Short-term debt (Note 7) |
$ | 19.6 | $ | 13.8 | ||||
| Current portion of long-term debt (Note 7) |
63.3 | 3.0 | ||||||
| Accounts payable, trade and other |
238.6 | 299.5 | ||||||
| Accrued and other liabilities |
275.6 | 304.3 | ||||||
| Guarantees of vendor financing (Note 15) |
37.4 | 44.3 | ||||||
| Accrued pensions and other postretirement benefits, current (Note 13) |
13.2 | 13.7 | ||||||
| Income taxes |
50.6 | 48.9 | ||||||
| Total current liabilities |
698.3 | 727.5 | ||||||
| Long-term debt, less current portion (Note 7) |
994.8 | 1,033.4 | ||||||
| Accrued pension and other postretirement benefits, long-term (Note 13) |
127.8 | 132.1 | ||||||
| Environmental liabilities, continuing and discontinued (Note 9) |
161.3 | 156.0 | ||||||
| Reserve for discontinued operations (Note 8) |
61.6 | 65.6 | ||||||
| Other long-term liabilities |
63.7 | 77.6 | ||||||
| Minority interests in consolidated companies |
47.8 | 48.3 | ||||||
| Commitments and contingent liabilities (Note 15) |
||||||||
| Stockholders’ equity |
||||||||
| Preferred stock, no par value, authorized 5,000,000 shares; no shares issued in 2004 or 2003 |
— | — | ||||||
| Common stock, $0.10 par value, authorized 130,000,000 shares in 2004 and 2003; 44,289,946 issued shares at June 30, 2004 and 43,203,561 issued shares at December 31, 2003 |
4.4 | 4.3 | ||||||
| Capital in excess of par value of common stock |
374.7 | 338.8 | ||||||
| Retained earnings |
810.8 | 774.6 | ||||||
| Accumulated other comprehensive loss (Note 11) |
(33.6 | ) | (21.8 | ) | ||||
| Treasury stock, common, at cost: 7,940,761 shares at June 30, 2004 and 7,942,161 shares at December 31, 2003 |
(507.7 | ) | (507.6 | ) | ||||
| Total stockholders’ equity |
648.6 | 588.3 | ||||||
| Total liabilities and stockholders’ equity |
$ | 2,803.9 | $ | 2,828.8 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
| (in Millions) |
Six Months Ended June 30, |
|||||||
| 2004 |
2003 |
|||||||
| (unaudited) | ||||||||
| Cash provided (required) by operating activities of continuing operations: |
||||||||
| Net income from continuing operations |
$ | 48.1 | $ | 23.6 | ||||
| Adjustments from net income to cash required by operating activities of continuing operations: |
||||||||
| Depreciation and amortization |
66.7 | 61.4 | ||||||
| Equity in loss of affiliates |
10.0 | 8.7 | ||||||
| Restructuring and other charges (Note 6) |
2.3 | — | ||||||
| Deferred income taxes |
(9.8 | ) | 7.5 | |||||
| Minority interests |
1.0 | 1.1 | ||||||
| Other |
(5.7 | ) | 4.8 | |||||
| Changes in operating assets and liabilities, excluding the effect of acquisitions and divestitures of businesses: |
||||||||
| Trade receivables, net |
(4.7 | ) | (25.4 | ) | ||||
| Inventories |
29.7 | (11.7 | ) | |||||
| Other current assets and other assets |
(9.8 | ) | (42.3 | ) | ||||
| Accounts payable, trade and other |
(60.9 | ) | (47.2 | ) | ||||
| Accrued and other liabilities |
21.6 | 50.7 | ||||||
| Income taxes |
1.7 | 2.5 | ||||||
| Accrued pension and other postretirement benefits, net (Note 13) |
2.6 | (1.4 | ) | |||||
| Environmental spending, continuing (Note 9) |
(8.1 | ) | (3.6 | ) | ||||
| Restructuring and other spending (Note 6) |
(11.1 | ) | (12.2 | ) | ||||
| Cash provided by operating activities |
73.6 | 16.5 | ||||||
| Cash required by discontinued operations: |
||||||||
| Environmental spending, discontinued (Note 9) |
(10.2 | ) | (5.0 | ) | ||||
| Other reserves |
(3.3 | ) | (3.1 | ) | ||||
| Cash required by discontinued operations |
(13.5 | ) | (8.1 | ) | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW (CONTINUED)
| (in Millions) |
Six Months Ended June 30, |
|||||||
| 2004 |
2003 |
|||||||
| (unaudited) | ||||||||
| Cash provided (required) by investing activities: |
||||||||
| Capital expenditures |
(30.8 | ) | (39.0 | ) | ||||
| Proceeds from disposal of property, plant and equipment |
1.5 | 2.5 | ||||||
| Decrease (increase) in investments |
0.9 | |||||||