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, 1997
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 office) (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, 1997
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, 1997 and December 31, 1996. . . . . . . . . . . 1
Condensed Consolidated Statements of Operations -
Three Months Ended March 31, 1997 and 1996 . . . . . . . .2
Condensed Consolidated Statement of Stockholders'
Equity - Three Months Ended March 31, 1997. . . . . . . . 3
Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1997 and 1996. . . . . . . . 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 . . . . . . . . . . . . . . . . . . . . 7
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . 7
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . 7
Item 4. Submission of Matters to a Vote
of Security Holders . . . . . . . . . . . . . . . . . . . 7
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . 7
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 7
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GREAT LAKES CARBON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<CAPTION>
March 31, December 31,
1997 1996
---------- -----------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 11,773 $ 24,097
Accounts receivable, net 31,805 28,934
Inventories 41,865 39,872
Prepaid expenses and other current assets 7,578 2,958
------- -------
Total Current Assets 93,021 95,861
Property, Plant and Equipment, net 48,845 47,530
Other Assets 5,242 5,514
------- -------
$147,108 $148,905
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 17,434 $ 22,222
Accrued expenses 8,752 11,592
Income taxes payable 5,788 3,840
Current portion of long-term debt 1,396 1,389
------- -------
Total Current Liabilities 33,370 39,043
Long-Term Debt, Less Current Portion 71,399 71,496
Other Long-Term Liabilities 3,857 3,857
Deferred Taxes 2,554 2,554
Stockholders' Equity
Common stock, par value $0.01 per share,
100,000 shares authorized and outstanding 1 1
Additional paid-in capital 5,509 5,509
Retained earnings 30,148 26,445
------- ------
35,928 31,955
------- -------
$147,108 $148,905
======= =======
<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,
1997 1996
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<S> <C> <C>
Net Sales $55,395 $52,178
Cost of Goods 42,236 37,533
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Gross Profit 13,159 14,645
Selling, general and administrative expenses 4,385 3,459
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Operating Income 8,774 11,186
Other income (expense):
Interest, net (1,867) (1,743)
Other, net (67) (76)
------- -------
(1,934) (1,819)
Income Before Income Taxes 6,840 9,367
Provision for income taxes 2,492 3,352
------- -------
Net Income $ 4,348 $ 6,015
======= =======
<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, 1996 $ 1 $ 5,509 $26,445 $31,955
Net income -- -- 4,348 4,348
Dividends paid -- -- (375) (375)
-------- ---------- --------- -----------
Balance at
March 31,1997 $ 1 $ 5,509 $30,418 $35,928
======== ========== ========= ===========
<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,
1997 1996
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<S> <C> <C>
Net Cash (Used) Provided By
Operating Activities $(8,208) $ 728
Net Cash Used In Investing Activities (3,651) (1,055)
Net Cash Used By Financing Activities (465) (102)
Decrease In Cash (12,324) (429)
Cash At Beginning Of Period 24,097 5,652
-------- --------
Cash At End Of Period $11,773 $ 5,223
======== ========
<FN>
See notes to consolidated financial statements.
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GREAT LAKES CARBON CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH, 31 1997
(Unaudited)
Note 1: Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Article 10 of Regulation 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,
1997 1996
-------- -----------
(In thousands)
Raw materials $29,113 $26,377
Finished goods 7,712 8,534
Supplies and spare parts 5,040 4,961
------- -------
$41,865 $39,872
======= =======
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Three Months Ended March 31, 1997 Compared to
Three Months Ended March 31, 1996.
The Company's net sales for the first quarter of 1997 increased to $55.4
million from $52.2 million in the prior year's quarter. Anode grade CPC net
sales increased to $44.5 million from $40.5 million, primarily as a result of
higher sales volume which was partially offset by decreased selling prices.
Industrial grade CPC net sales decreased to $10.5 million from $10.7 million,
primarily due to lower sales volume, which was partially offset by increased
selling prices.
Gross profit for the first quarter decreased to $13.2 million from $14.6
million in the prior year's quarter. The decrease in gross profit margin
was the result of an increase in cost of sales which more than offset the
increase in net sales. The higher cost of sales was mainly the result of
higher raw material costs.
Operating income for the first quarter decreased to $8.8 million from
$11.2 million in the prior year's quarter. The decrease in operating income
was the result of the reduced gross profit and an increase in selling, general
and administrative expenses to $4.4 million from $3.5 million, primarily
related to higher compensation and professional fee expenses.
Income before income taxes decreased to $6.8 million from $9.4 million in
the prior year's quarter primarily as a result of the reduced operating income
discussed above.
First quarter 1997 net income decreased to $4.3 million from $6.0 million
from the prior year's quarter, primarily due to the lower 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 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 1997 will be $23 million and
include amounts for a major expansion of the Company's La Plata, Argentina
facility operated by its wholly-owned subsidiary, Copetro S.A. The Company
expects to meet its liquidity needs through cash from operations, its revolving
credit line and a credit facility arrangement to finance the Copetro facility
expansion.
The revolfing credit line referred to above privides for borrowings of up
to $15.0 million, including a $10.0 million sub-limit for letters of credit,
and is subject to borrowing base limitations. As of May 5, 1997, the Company
had no borrowings and had outstanding letters of credit of $2.6 million under
this credit line.
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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, 1997.
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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: ___5/14/97______ /s/James D. McKenzie
--------------------
James D. McKenzie
President and Chief Executive Officer
Date: ___5/14/97______ /s/Ronald J. Statile
--------------------
Ronald J. Statile
Vice President and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 11,773
<SECURITIES> 0
<RECEIVABLES> 32,564
<ALLOWANCES> 759
<INVENTORY> 41,865
<CURRENT-ASSETS> 93,021
<PP&E> 128,065
<DEPRECIATION> 79,220
<TOTAL-ASSETS> 147,108
<CURRENT-LIABILITIES> 33,370
<BONDS> 71,399
0
0
<COMMON> 1
<OTHER-SE> 35,927
<TOTAL-LIABILITY-AND-EQUITY> 147,108
<SALES> 55,395
<TOTAL-REVENUES> 55,395
<CGS> 42,236
<TOTAL-COSTS> 42,236
<OTHER-EXPENSES> 84
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,867
<INCOME-PRETAX> 6,840
<INCOME-TAX> 2,492
<INCOME-CONTINUING> 4,348
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,348
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
