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 September 24, 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
November 8, 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)
| September 24, 2004 |
December 26, 2003 |
|||||||
| Assets | ||||||||
| Current assets: |
||||||||
| Cash |
$ | 2,580 | $ | 6,896 | ||||
| Accounts receivable, net |
58,156 | 41,441 | ||||||
| Inventories, net |
68,311 | 52,202 | ||||||
| Prepaid expenses and other |
10,017 | 10,186 | ||||||
| Deferred tax asset |
2,181 | 2,889 | ||||||
| 141,245 | 113,614 | |||||||
| Property, plant and equipment, at cost |
305,977 | 290,795 | ||||||
| Less accumulated depreciation |
(105,104 | ) | (92,142 | ) | ||||
| 200,873 | 198,653 | |||||||
| Investments |
66,013 | 66,606 | ||||||
| Intangible assets |
7,432 | 5,790 | ||||||
| Other assets |
20,433 | 10,811 | ||||||
| $ | 435,996 | $ | 395,474 | |||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 63,087 | $ | 45,993 | ||||
| Accrued liabilities |
20,014 | 26,913 | ||||||
| Current portion of long-term debt |
6,729 | 13,626 | ||||||
| Current portion of capitalized lease obligations |
2,316 | 2,324 | ||||||
| 92,146 | 88,856 | |||||||
| Long-term debt, net of current portion |
284,543 | 237,478 | ||||||
| Capitalized lease obligations, net of current portion |
4,189 | 6,038 | ||||||
| Deferred tax liability |
1,074 | 3,552 | ||||||
| Other non-current liabilities |
3,502 | 3,608 | ||||||
| Minority interest in consolidated subsidiary |
46,479 | 48,934 | ||||||
| Commitments and contingencies |
— | — | ||||||
| Stockholders’ equity: |
||||||||
| Common stock |
1 | 1 | ||||||
| Additional paid-in capital |
19,387 | 19,387 | ||||||
| Retained deficit |
(17,940 | ) | (15,267 | ) | ||||
| Cumulative translation adjustment |
2,615 | 2,887 | ||||||
| Total stockholders’ equity |
4,063 | 7,008 | ||||||
| $ | 435,996 | $ | 395,474 | |||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands)
(Unaudited)
| For the three months ended |
For the nine months ended |
|||||||||||||||
| September 24, 2004 |
September 26, 2003 |
September 24, 2004 |
September 26, 2003 |
|||||||||||||
| Net sales |
$ | 120,274 | $ | 86,929 | $ | 324,679 | $ | 250,417 | ||||||||
| Cost of goods sold |
101,960 | 70,010 | 266,745 | 204,886 | ||||||||||||
| Gross profit |
18,314 | 16,919 | 57,934 | 45,531 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Distribution |
7,423 | 6,227 | 21,106 | 17,099 | ||||||||||||
| Selling, general and administrative |
7,532 | 6,839 | 24,299 | 21,737 | ||||||||||||
| Other expenses (Note 5) |
— | — | — | 1,838 | ||||||||||||
| Income from operations |
3,359 | 3,853 | 12,529 | 4,857 | ||||||||||||
| Interest, net |
6,571 | 5,089 | 18,602 | 15,583 | ||||||||||||
| Income from unconsolidated affiliates |
(150 | ) | (792 | ) | (460 | ) | (2,304 | ) | ||||||||
| Other, net |
127 | 15 | 484 | 429 | ||||||||||||
| Minority interest in operations of consolidated subsidiary |
(842 | ) | — | (2,454 | ) | — | ||||||||||
| Loss before income taxes |
(2,347 | ) | (459 | ) | (3,643 | ) | (8,851 | ) | ||||||||
| Provision (benefit) for income taxes: |
||||||||||||||||
| Current |
162 | 125 | 1,281 | 396 | ||||||||||||
| Deferred |
(1,039 | ) | (299 | ) | (2,251 | ) | (3,759 | ) | ||||||||
| (877 | ) | (174 | ) | (970 | ) | (3,363 | ) | |||||||||
| Net loss |
$ | (1,470 | ) | $ | (285 | ) | $ | (2,673 | ) | $ | (5,488 | ) | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| For the nine months ended |
||||||||
| September 24, 2004 |
September 26, 2003 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | (2,673 | ) | $ | (5,488 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization |
15,403 | 13,341 | ||||||
| Deferred income taxes |
(2,251 | ) | (3,759 | ) | ||||
| Income from unconsolidated affiliates |
(460 | ) | (2,304 | ) | ||||
| Minority interest in operations of consolidated subsidiary |
(2,454 | ) | — | |||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable, net |
(16,622 | ) | (3,257 | ) | ||||
| Inventories |
(16,128 | ) | (958 | ) | ||||
| Prepaid expenses and other |
(1,373 | ) | (3,726 | ) | ||||
| Accounts payable |
17,010 | 6,238 | ||||||
| Accrued liabilities and other |
(6,708 | ) | (4,302 | ) | ||||
| Net cash used in operating activities |
(16,256 | ) | (4,215 | ) | ||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
(16,471 | ) | (9,329 | ) | ||||
| Distributions from unconsolidated affiliates |
3,144 | 4,241 | ||||||
| Investments in unconsolidated affiliates |
(2,091 | ) | (4,123 | ) | ||||
| Increase in other assets |
(6,430 | ) | (1,607 | ) | ||||
| Net cash used in investing activities |
(21,848 | ) | (10,818 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Proceeds from borrowings |
89,877 | 199,054 | ||||||
| Repayment of debt |
(49,689 | ) | (179,400 | ) | ||||
| Payments on capitalized lease obligations |
(1,857 | ) | (713 | ) | ||||
| Payment of financing fees |
(4,530 | ) | (5,210 | ) | ||||
| Net cash provided by financing activities |
33,801 | 13,731 | ||||||
| Effect of exchange rate changes on cash |
(13 | ) | (861 | ) | ||||
| Net decrease in cash |
(4,316 | ) | (2,163 | ) | ||||
| Cash, beginning of period |
6,896 | 4,059 | ||||||
| Cash, end of period |
$ | 2,580 | $ | 1,896 | ||||
| Supplemental disclosure of cash flows information: |
||||||||
| Cash paid during the period for interest |
$ | 19,941 | $ | 15,397 | ||||
| Cash paid during the period for income taxes |
$ | 115 | $ | 1,055 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
Summary of Operating Segments
(In thousands)
(Unaudited)
| For the three months ended |
For the nine months ended |
|||||||||||||||
| September 24, 2004 |
September 26, 2003 |
September 24, 2004 |
September 26, 2003 |
|||||||||||||
| Net Sales to Unaffiliated Customers: |
||||||||||||||||
| Packaging |
$ | 62,966 | $ | 48,790 | $ | 179,237 | $ | 141,575 | ||||||||
| Specialty Chemicals |
60,014 | 40,446 | 154,439 | 115,591 | ||||||||||||
| Corporate and Other |
— | — | — | — | ||||||||||||
| Transfers Between Operating Segments (1) |
(2,706 | ) | (2,307 | ) | (8,997 | ) | (6,749 | ) | ||||||||
| Consolidated |
$ | 120,274 | $ | 86,929 | $ | 324,679 | $ | 250,417 | ||||||||