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 June 25, 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 August 4, 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)


	June 25, 2004			December 26, 2003
Assets
Current assets:
Cash	$	2,725		$	6,896
Accounts receivable, net		52,373			41,441
Inventories, net		60,643			52,202
Prepaid expenses and other		12,749			10,186
Deferred tax asset		2,889			2,889

		131,379			113,614

Property, plant and equipment, at cost		294,756			290,795
Less accumulated depreciation		(100,159	)		(92,142	)

		194,597			198,653

Investments		65,951			66,606
Intangible assets		6,166			5,790
Other assets		18,177			10,811

	$	416,270		$	395,474

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	52,329		$	45,993
Accrued liabilities		22,413			26,913
Current portion of long-term debt		4,176			13,626
Current portion of capitalized lease obligations		2,001			2,324

		80,919			88,856

Long-term debt, net of current portion		271,602			237,478
Capitalized lease obligations, net of current portion		5,779			6,038
Deferred tax liability		2,398			3,552
Other non-current liabilities		3,534			3,608
Minority interest in consolidated subsidiary		47,320			48,934

Commitments and contingencies		—			—

Stockholders’ equity:
Common stock		1			1
Additional paid-in capital		19,387			19,387
Retained deficit		(16,470	)		(15,267	)
Cumulative translation adjustment		1,800			2,887

Total stockholders’ equity		4,718			7,008

	$	416,270		$	395,474

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						For the six months ended
	June 25, 2004			June 27, 2003			June 25, 2004			June 27, 2003
Net sales	$	108,105		$	83,235		$	204,405		$	163,488

Cost of goods sold		87,158			71,421			164,785			134,876

Gross profit		20,947			11,814			39,620			28,612

Operating expenses:
Distribution		7,435			5,989			13,683			10,872
Selling, general and administrative		8,893			7,366			16,767			14,898
Other expenses (Note 5)		—			—			—			1,838

Income (loss) from operations		4,619			(1,541	)		9,170			1,004

Interest, net		6,424			5,076			12,031			10,494
Income from unconsolidated affiliates		(151	)		(684	)		(310	)		(1,512	)
Other, net		167			224			357			414
Minority interest in operations of consolidated subsidiary		(806	)		—			(1,612	)		—

Loss before income taxes		(1,015	)		(6,157	)		(1,296	)		(8,392	)

Provision (benefit) for income taxes:
Current		660			(93	)		1,119			271
Deferred		(643	)		(2,247	)		(1,212	)		(3,460	)

		17			(2,340	)		(93	)		(3,189	)

Net loss	$	(1,032	)	$	(3,817	)	$	(1,203	)	$	(5,203	)

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 six months ended
	June 25, 2004			June 27, 2003
Cash flows from operating activities:
Net loss	$	(1,203	)	$	(5,203	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		9,754			9,134
Deferred income taxes		(1,212	)		(3,460	)
Income from unconsolidated affiliates		(310	)		(1,512	)
Minority interest in operations of consolidated subsidiary		(1,612	)		—
Changes in operating assets and liabilities:
Accounts receivable, net		(11,716	)		(5,025	)
Inventories		(8,706	)		(5,387	)
Prepaid expenses and other		(2,589	)		(2,783	)
Accounts payable		6,740			3,149
Accrued liabilities and other		(5,334	)		392

Net cash used in operating activities		(16,188	)		(10,695	)

Cash flows from investing activities:
Capital expenditures		(5,354	)		(6,784	)
Distributions from affiliates		3,056			2,809
Investments in affiliates		(2,073	)		(2,456	)
Increase in other assets		(4,505	)		(466	)

Net cash used in investing activities		(8,876	)		(6,897	)

Cash flows from financing activities:
Proceeds from borrowings		76,457			198,449
Repayment of debt		(51,562	)		(177,126	)
Payments on capitalized lease obligations		(1,401	)		(413	)
Payment of financing fees		(2,670	)		(4,546	)

Net cash provided by financing activities		20,824			16,364

Effect of exchange rate changes on cash		69			(1,101	)

Net decrease in cash		(4,171	)		(2,329	)

Cash, beginning of period		6,896			4,059

Cash, end of period	$	2,725		$	1,730

Supplemental disclosure of cash flows information:
Cash paid during the period for interest	$	10,345		$	6,396

Cash paid during the period for income taxes	$	111		$	1,029

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						For the six months ended
	June 25, 2004			June 27, 2003			June 25, 2004			June 27, 2003
Net Sales to Unaffiliated Customers:
Packaging	$	60,373		$	47,813		$	116,271		$	92,785
Specialty Chemicals		51,104			38,090			94,425			75,145
Corporate and Other		—			—			—			—
Transfers Between Operating Segments⁽¹⁾		(3,372	)		(2,668	)		(6,291	)		(4,442	)

Consolidated	$	108,105		$	83,235		$	204,405		$	163,488