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, 1996
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: 33-98522
GREAT LAKES CARBON CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-3637043
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 East 59th Street, New York, New York 10022
(Address of principal executive offices) (Zip Code)
(212) 527-3002
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former
fiscal year, if changed since last report)
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 [ ].
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GREAT LAKES CARBON CORPORATION
FORM 10-Q MARCH 31, 1996
CONTENTS
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Page No.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
March 31, 1996 and December 31, 1995 . . . . . . . . . . 1
Condensed Consolidated Statements of Operations -
Three Months Ended March 31, 1996 and 1995 . . . . . . . 2
Condensed Consolidated Statement of Stockholders'
Equity - Three Months Ended March 31, 1996 . . . . . . . 3
Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1996 and 1995 . . . . . . . 4
Notes to Condensed Consolidated Financial Statements . . 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . .8
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . .8
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . .8
Item 4. Submission of Matters to a Vote
of Security Holders. . . . . . . . . . . . . . . . . . .8
Item 5. Other Information . . . . . . . . . . . . . . . . . . . .8
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . .8
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GREAT LAKES CARBON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<CAPTION>
March 31, December 31,
1996 1995
(Unaudited) (Audited)
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<S> <C> <C>
ASSETS
Current Assets
Cash $ 5,223 $ 5,652
Accounts receivable, net 24,805 22,083
Inventories 35,807 26,171
Prepaid expenses and other current assets 4,267 3,264
---------- ----------
Total Current Assets 70,102 57,170
Property, Plant and Equipment - Net 49,111 50,255
Other Assets 6,316 6,505
---------- ----------
$ 125,529 $ 113,930
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 17,290 $ 15,779
Accrued expenses 11,060 9,877
Income taxes payable 5,909 3,097
Current portion of long-term debt 1,393 1,406
---------- ----------
Total Current Liabilities 35,652 30,159
Long-Term Debt, Less Current Portion 72,796 72,885
Other Long-Term Liabilities 2,898 2,898
Deferred Taxes 2,272 2,092
Stockholders' Equity
Common stock, par value $0.01 per share;
authorized, issued and outstanding
100,000 shares 1 1
Additional paid-in capital 5,509 5,509
Retained earnings 6,401 386
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11,911 5,896
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$ 125,529 $ 113,930
<FN>
See notes to consolidated financial statements.
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GREAT LAKES CARBON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands)
<CAPTION>
Three Months Ended March 31,
1996 1995
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Net Sales $ 52,178 $ 36,869
Cost of Goods Sold 37,533 30,296
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Gross Profit 14,645 6,573
Selling, general, and administrative expenses 3,459 2,234
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Operating Income 11,186 4,339
Other income (expense):
Interest, net (1,743) (315)
Asset utilization fee to parent -- (1,540)
Other, net (76) 82
---------- ----------
Income Before Income Taxes 9,367 2,566
Provision for income taxes 3,352 857
---------- ----------
Net Income $ 6,015 $ 1,709
<FN>
See notes to consolidated financial statements.
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GREAT LAKES CARBON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
(In thousands)
<CAPTION>
Additional Total
Common Paid-In Retained Stockholders'
Stock Capital Earnings Equity
--------- --------- --------- ------------
<S> <C> <C> <C> <C>
Balance at December 31, 1995 $ 1 $ 5,509 $ 386 $ 5,896
Net Income -- -- 6,015 6,015
--------- --------- --------- ------------
Balance at March 31, 1996 $ 1 $ 5,509 $ 6,401 $ 11,911
<FN>
See notes to consolidated financial statements.
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GREAT LAKES CARBON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<CAPTION>
Three Months Ended March 31,
1996 1995
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<S> <C> <C>
Net Cash Provided (Used) By Operating Activities $ 728 $ (182)
Net Cash Used In Investing Activities (1,055) (635)
Net Cash (Used) Provided By Financing Activities (102) 2,250
(Decrease) Increase In Cash (429) 1,433
Cash At Beginning Of Period 5,652 310
---------- ----------
Cash At End Of Period $ 5,223 $ 1,743
<FN>
See notes to consolidated financial statements.
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GREAT LAKES CARBON CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(Unaudited)
Note 1: Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Article 10 of Regulations S-X and, therefore,
do not include all information and footnotes necessary for a fair
presentation of financial position, results of operations, and cash flows
in conformity with generally accepted accounting principles. The information
furnished reflects all adjustments (consisting of normal recurring
adjustments) which are, in the opinion of management,necessary for a fair
summary of the results of operations.
Note 2: Inventories
Inventories are as follows:
March 31, December 31,
1996 1995
(In Thousands)
---------- ----------
Raw materials $ 21,670 $ 16,358
Finished goods 9,632 5,573
Supplies and spare parts 4,505 4,240
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$ 35,807 $ 26,171
Note 3: Accrued Expenses
Accrued expenses included interest payable of $1,929,000 and $359,000 at
March 31, 1996 and December 31, 1995, respectively.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Three Months Ended March 31, 1996 Compared to
Three Months Ended March 31, 1995.
The Company's net sales for the first quarter of 1996 increased to $52.2
million from $36.9 million in the prior year's quarter. Anode grade CPC net
sales increased to $40.5 million from $29.3 million, primarily as a result of
increased selling prices, which were partially offset by lower sales volume.
Industrial grade CPC net sales increased to $10.7 million from $6.9 million,
due to both higher sales volume and increased selling prices.
Gross profit for the first quarter increased to $14.6 million from $6.6
million in the prior year's quarter. The increase in gross profit margin was
the result of the increase in net sales which more than offset an increase in
cost of sales. The higher cost of sales was mainly the result of higher raw
material costs.
Operating income for the first quarter increased to $11.2 million from
$4.3 million in the prior year's quarter. The increase in operating income
was the result of the improved gross profit that was partially offset by an
increase in selling, general and administrative expenses of $1.2 million,
primarily related to higher compensation and office overhead expenses.
Income before income taxes increased to $9.4 million from $2.6 million in
the prior year's quarter primarily as a result of the improvement in operating
income discussed above. Other income(expense) was essentially unchanged from
the prior year's quarter since the increase in net interest expense of $1.4
million arising from the outstanding $65 million, 10% Senior Secured Notes,
issued in December 1995, was offset by the effects of a $1.5 million decrease
in asset utilization fee to parent, which was terminated in December 1995, and
a $0.2 million increase in other expense.
First quarter 1996 net income increased to $6.0 million from $1.7 million
from the prior year's quarter, primarily due to the higher income before
income taxes described above.
Liquidity and Capital Resources
The Company's liquidity requirements are primarily for debt service,
capital expenditures and general working capital needs. The Company expects
to meet its liquidity needs through cash from operations and its revolving
credit facility. The timing of inventory receipts and product shipments,
all of which transactions are entirely U.S. dollar denominated, can have a
substantial impact on the Company's working capital requirements. Capital
investments generally relate to facility maintenance and projects to improve
plant throughput and product quality. It is anticipated that, capital
investments for 1996 will be $6.0 million.
The $15.0 million revolving credit facility referred to above includes a
$10.0 million sub-limit for letters of credit and is subject to borrowing
base limitations. As of May 10, 1996, the Company had zero borrowings and
outstanding letters of credit of $2.7 million under this facility.
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GREAT LAKES CARBON CORPORATION
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Change in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits:
Not applicable.
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K with the Commission during
the three months ended March 31, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GREAT LAKES CARBON CORPORATION
Date: ____5/13/96_____ James D. McKenzie
James D. McKenzie
President and Chief Executive Officer
Date: ____5/14/96_____ Ronald J. Statile
Ronald J. Statile
Vice President and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 5,223
<SECURITIES> 0
<RECEIVABLES> 25,355
<ALLOWANCES> 550
<INVENTORY> 35,807
<CURRENT-ASSETS> 70,102
<PP&E> 119,124
<DEPRECIATION> 70,013
<TOTAL-ASSETS> 125,529
<CURRENT-LIABILITIES> 35,652
<BONDS> 72,796
0
0
<COMMON> 1
<OTHER-SE> 11,910
<TOTAL-LIABILITY-AND-EQUITY> 125,529
<SALES> 52,178
<TOTAL-REVENUES> 52,178
<CGS> 37,533
<TOTAL-COSTS> 37,533
<OTHER-EXPENSES> 76
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,743
<INCOME-PRETAX> 9,367
<INCOME-TAX> 3,352
<INCOME-CONTINUING> 6,015
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,015
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
