<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
------
Exchange Act of 1934
For the quarterly period ended March 31, 1999
OR
______ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period to
Commission File Number: 333-1992
RBX CORPORATION
(Exact name of Registrants as specified in their charters)
---------------------------------------------------------
DELAWARE 94-3231901
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5221 VALLEYPARK DRIVE
ROANOKE, VIRGINIA 24019
(Address of principal executive offices)
Registrant's telephone number, including area code: (540) 561 - 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____
------
The number of shares of Common Stock of RBX Corporation, $0.01 per share par
value, outstanding as of March 31, 1999 was 1,000.
<PAGE>
Index
-----
<TABLE>
<S> <C>
PART I.............................................................................................. 1
ITEM 1. Financial Statements (unaudited)........................................................ 1
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations.............................................................................. 7
PART II............................................................................................. 12
ITEM 6. Exhibits and Reports on Form 8-K........................................................ 12
</TABLE>
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
RBX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
December 31, March 31,
1998 1999
---- ----
<S> <C> <C>
ASSETS
Cash and cash equivalents................................................ $ 122 $ 115
Accounts receivable, less allowance for doubtful accounts of $1,459 and
$1,727, respectively.................................................. 33,474 36,705
Inventories.............................................................. 25,450 26,957
Prepaid and other current assets......................................... 426 377
--------- ---------
Total current assets..................................................... 59,472 64,154
Property, plant and equipment, net....................................... 72,797 71,665
Intangibles and other assets, net........................................ 6,278 5,954
--------- ---------
Total assets............................................................. $ 138,547 $ 141,773
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable......................................................... $ 12,726 $ 18,549
Accrued liabilities...................................................... 27,940 26,860
Current portion of postretirement benefit obligation..................... 3,030 3,030
Current portion of long-term debt........................................ 327 327
--------- ---------
Total current liabilities................................................ 44,023 48,766
Long-term debt........................................................... 205,745 205,663
Postretirement benefit obligation........................................ 30,083 30,302
Pension benefit obligation............................................... 8,461 8,804
Other liabilities........................................................ 1,704 1,704
Commitments and contingencies............................................ - -
Stockholder's equity:
Common stock, $0.01 par value, 1,000 shares authorized, issued and
outstanding....................................................... - -
Additional paid-in capital............................................ 58,103 58,103
Accumulated deficit................................................... (209,572) (211,569)
--------- ---------
Total stockholder's equity............................................... (151,469) (153,466)
--------- ---------
Total liabilities and stockholder's equity............................... $ 138,547 $ 141,773
========= =========
</TABLE>
See notes to condensed consolidated financial statements
1
<PAGE>
RBX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
<TABLE>
<CAPTION>
3 Months 3 Months
Ended Ended
March 31, March 31,
1998 1999
----------------- -----------------
<S> <C> <C>
Net sales................................................................ $72,441 $64,421
Cost of goods sold....................................................... 64,252 53,451
------- -------
Gross profit............................................................. 8,189 10,970
Selling, general and administrative costs................................ 7,563 6,229
Management fees.......................................................... 251 303
Amortization of goodwill and other intangibles........................... 833 -
Other expense............................................................ 26 -
------- -------
Operating income (loss).................................................. (484) 4,438
Interest expense, including amortization of deferred financing fees...... 6,319 6,435
------- -------
Net loss................................................................. $(6,803) $(1,997)
======= =======
</TABLE>
See notes to condensed consolidated financial statements
2
<PAGE>
RBX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
3 Months 3 Months
Ended Ended
March 31, March 31,
1998 1999
----------------- -----------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss................................................................. $(6,803) $(1,997)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation.......................................................... 2,459 1,965
Amortization.......................................................... 1,152 324
Loss on disposal of equipment......................................... 26 --
Increase (decrease) in cash from changes in assets and liabilities:
Accounts receivable............................................... (2,887) (3,231)
Inventories....................................................... (2,597) (1,507)
Prepaid and other current assets.................................. (136) 49
Accounts payable.................................................. 4,986 5,823
Accrued liabilities............................................... 4,414 (1,080)
Other liabilities................................................. 300 562
------- -------
Net cash provided by operating activities................................ 914 908
------- -------
INVESTING ACTIVITIES
Capital expenditures..................................................... (1,757) (833)
Proceeds from disposals of property, plant and equipment................. 5 --
------- -------
Net cash used in investing activities.................................... (1,752) (833)
------- -------
FINANCING ACTIVITIES
Proceeds from borrowings................................................. 1,000 5,000
Principal payments on long-term debt..................................... (81) (5,082)
------- -------
Net cash provided by (used in) financing activities...................... 919 (82)
------- -------
Net increase (decrease) in cash and cash equivalents..................... 81 (7)
Cash and cash equivalents:
Beginning of period..................................................... 166 122
------- -------
End of period........................................................... $ 247 $ 115
======= =======
</TABLE>
See notes to condensed consolidated financial statements
3
<PAGE>
RBX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except as otherwise noted)
1. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements include the
accounts of RBX Corporation and its wholly owned subsidiaries (the "Company").
RBX Corporation's subsidiaries, Rubatex Corporation, OleTex, Inc., Groendyk Mfg
Co., Inc., Universal Polymer & Rubber, Inc. ("Universal"), Midwest Rubber Custom
Mixing Corp., and Hoover-Hanes Rubber Custom Mixing Corp., operate manufacturing
facilities which are located in the southeastern United States, Ohio, and
Illinois. The Company is a wholly owned subsidiary of RBX Group, Inc., ("RBX
Group") a non-operating holding company.
The interim financial data as of and for the three months ended March 31, 1999
are unaudited and have been prepared in accordance with generally accepted
accounting principles for interim financial information. Accordingly, they do
not include all of the information and notes required by generally accepted
accounting principles for complete financial statements. In management's
opinion, all adjustments (consisting of adjustments of a normal recurring
nature) necessary for a fair presentation have been included. The year-end
balance sheet information was derived from audited financial statements, but
excludes certain disclosures included in the Company's annual report on Form
10-K.
These condensed consolidated financial statements should be read in conjunction
with the audited financial statements and notes thereto as well as the other
information included in the Company's annual report on Form 10-K for the year
ended December 31, 1998. The results of operations and cash flows for the
interim periods presented are not necessarily indicative of the results for the
full year or any other interim period.
2. INVENTORIES
Components of inventory are as follows:
<TABLE>
<CAPTION>
December 31, March 31,
1998 1999
----------- ----------
<S> <C> <C>
Raw materials................................. $10,759 $11,095
Work-in-process............................... 3,539 3,969
Finished goods................................ 11,152 11,893
------- -------
$25,450 $26,957
======= =======
</TABLE>
3. LONG-TERM DEBT
RBX Corporation is a holding company with no assets or operations other than its
investments in its subsidiaries. All of RBX Corporation's subsidiaries are
wholly owned and have guaranteed the Senior Secured Notes and the Senior
Subordinated Notes on a full, unconditional, and joint and several basis.
Indebtedness under the Company's revolving credit facility is guaranteed by RBX
Corporation and its existing and future subsidiaries and is collateralized by a
first-priority lien on all accounts receivable, inventory, and general
intangibles (to the extent related to accounts receivable and inventory).
Management has determined that separate financial statements of the guarantor
subsidiaries would not be material to an investor. Accordingly, separate
financial statements of the guarantor subsidiaries have not been presented.
4
<PAGE>
RBX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
(CONTINUED)
3. LONG-TERM DEBT, CONTINUED
The Company's indebtedness contains certain restrictions which, among other
things, restrict its ability to incur additional indebtedness, issue preferred
stock, incur liens, pay dividends, make certain other restricted payments,
consummate certain asset sales, enter into certain transactions with affiliates,
merge or consolidate with any other person or sell, assign, transfer, lease,
convey or otherwise dispose of substantially all of its assets. In addition,
the Company's indebtedness contains certain financial covenants including
maintenance of a minimum level of earnings before interest, taxes, depreciation
and amortization ("EBITDA").
In February 1999, as anticipated at the time of the first amendment to the
Credit Agreement, the Company and its lenders entered into a second amendment to
the Credit Agreement which waived the financial covenants to which the Company
was subject through December 31, 1999 and established requirements with respect
to the maintenance of a minimum level of EBITDA for the four consecutive
quarters ending March 31, 1999, June 30, 1999, September 30, 1999, and December
31, 1999. The amendment also provides for a revised limitation on capital
spending. The Company was in compliance with the terms of its indebtedness as of
March 31, 1999.
As of March 31, 1999, the Company had available unused borrowing capacity of
$17.6 million under the revolving credit facility.
4. CONTINGENT LIABILITIES
The Company is highly leveraged. At March 31, 1999, the Company's indebtedness
was $206.0 million and its stockholder's equity was a deficit of $153.5 million.
The Company and its subsidiaries are involved in various suits and claims in the
normal course of business. In the opinion of management, after consultation with
counsel, the ultimate liabilities and losses, if any, that may result from such
suits and claims are not expected to have a material adverse effect on the
financial position, results of operations or liquidity of the Company.
The Company is subject to federal, state and local environmental laws which
regulate air and water emissions and discharges; the generation, storage,
treatment, transportation and disposal of solid and hazardous waste; and the
release of hazardous substances, pollutants and contaminants into the
environment. In addition, the Company is responsible for the environmental
clean-up of certain property for contamination which occurred prior to the
Company's ownership. The Company is involved in various environmental
remediation activities resulting from past operations, including designation as
a potentially responsible party, with others, at various EPA designated
Superfund sites. In developing its estimate of environmental remediation costs,
the Company considers, among other things, currently available technological
solutions, alternative cleanup methods, risk-based assessments of the
contamination, and estimates developed by independent environmental consultants.
The Company does not maintain insurance coverage for environmental matters.
Reserves have been recorded which, in management's estimate, will be sufficient
to satisfy anticipated costs of known remediation requirements. As a result of
factors such as the continuing evolution of environmental laws and regulatory
requirements, the availability and application of technology, and the
identification of presently unknown RBX remediation sites, estimated costs for
future environmental compliance and remediation are necessarily imprecise, and
it is not possible to predict the amount or timing
5
<PAGE>
RBX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
(CONTINUED)
of future costs of environmental remediation requirements which may subsequently
be determined. Based upon information presently available, such future costs are
not expected to have a material adverse effect on the Company's competitive or
financial position or its ongoing results of operations. However, such costs
could be material to results of operations in a future period.
5. SEGMENT INFORMATION
Summarized financial information for the Company's reportable segments follows.
The information designated as "Other" represents corporate related items which
are not allocated to reportable segments.
<TABLE>
<CAPTION>
3 Months 3 Months
Ended Ended
March 31, March 31,
1998 1999
----------- -----------
<S> <C> <C>
Foam Group:
Revenues........................................... $ 54,424 $ 44,748
Segment profits.................................... (299) 3,782
Total assets....................................... 129,770 108,877
Mixing Group:
Revenues........................................... 18,017 19,673
Segment profits.................................... 2,038 2,264
Total assets....................................... 22,397 26,827
Other:
Revenues........................................... - -
Segment loss....................................... (8,542) (8,043)
Total assets....................................... 127,570 6,069
Total:
Revenues........................................... 72,441 64,421
Net loss........................................... (6,803) (1,997)
Total assets....................................... 279,737 141,773
</TABLE>
The following table presents the details of "Other" segment loss.
<TABLE>
<CAPTION>
3 Months 3 Months
Ended Ended
March 31, March 31,
1998 1999
----------- ----------
<S> <C> <C>
Corporate expenses................................... $ 761 $1,305
Management fees...................................... 251 303
Depreciation and amortization........................ 1,530 324
Interest expense..................................... 6,000 6,111
------ ------
$8,542 $8,043
====== ======
</TABLE>
6
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
INTRODUCTION
The following discussion and analysis provides information which management
believes is relevant to an understanding of the operations and financial
condition of RBX Corporation and subsidiaries (the "Company"). This discussion
and analysis should be read in conjunction with the condensed consolidated
financial statements and notes thereto included in this Form 10-Q as well as the
Company's Annual Report on Form 10-K for the year ended December 31, 1998.
BASIS OF PRESENTATION
The following table sets forth, for the periods shown, net sales, gross profit,
selling, general and administrative costs ("SG&A"), operating income (loss) and
net loss in millions of dollars and as a percentage of net sales.
<TABLE>
<CAPTION>
Quarter Ended March 31,
----------------------------------------------------------
1998 1999
------------------------- ---------------------------
<S> <C> <C> <C> <C>
Net sales......................................... $72.4 100.0% $64.4 100.0%
Gross profit...................................... 8.2 11.3 11.0 17.1
SG&A.............................................. 7.6 10.5 6.2 9.6
Operating income (loss)........................... (0.5) (0.7) 4.4 6.8
Net loss.......................................... (6.8) (9.4) (2.0) (3.1)
</TABLE>
RESULTS OF OPERATIONS
Net Sales
Net sales decreased to $64.4 million for the three months ended March 31, 1999
compared to $72.4 million for the same period in 1998, a decrease of $8.0
million or 11.0%.
Net sales for the Company's foam product operations (the "Foam Group") decreased
to $44.8 million for the quarter ended March 31, 1999 from $54.4 million for the
quarter ended March 31, 1998, a decrease of $9.6 million or 17.6%. Of this
decrease, $4.4 million is attributable to the disposal of the Universal business
in the third quarter of 1998.
Excluding Universal, the Foam Group's net sales decreased to $44.8 million for
the three months ended March 31, 1999 from $50.0 million for the same period in
1998, a decrease of $5.2 million or 10.4%. This decrease is attributable to the
loss of Ensolite customers due to poor shipping performance in 1998, the loss of
fabric laminate customers to Asian competitors, and the loss of fabricated parts
customers to lower cost competitors.
After elimination of sales to the Foam Group, net sales at the Company's custom
rubber mixing operations (the "Mixing Group") increased to $19.7 million in the
first quarter of 1999 compared to $18.0 million in the first quarter of 1998, an
increase of $1.7 million or 9.4%.
Gross Profit
Gross profit increased to $11.0 million for the three months ended March 31,
1999 from $8.2 million for the three months ended March 31, 1998, an increase of
$2.8 million or 34.1%.
Gross profit for the Foam Group increased to $8.1 million in the first quarter
of 1999 from $5.8 million in the first quarter of 1998, an increase of $2.3
million or 39.7%. This increase is largely attributable to the
7
<PAGE>
cost cutting measures implemented in connection with the reorganization of the
Company's operations which began in July, 1998. Gross profit was also positively
impacted by improvements in operating performance at the Company's Conover,
North Carolina facility.
Mixing Group gross profit increased to $2.9 million in the first quarter of 1999
from $2.7 million in the first quarter of 1998, an increase of $0.2 million or
7.4%. This increase resulted primarily from increased volume at the Mixing Group
in the first quarter of 1999 relative to the first quarter of 1998.
SG&A
SG&A decreased to $6.2 million in the first quarter of 1999 from $7.6 million in
the first quarter of 1998, a decrease of $1.4 million or 18.4%. As a
percentage of net sales, SG&A decreased to 9.6% in 1999 from 10.5% in 1998.
This decrease in SG&A is primarily a result of cost cutting measures including
savings associated with headcount reductions.
Operating Income
Operating income increased to $4.4 million for the three months ended March 31,
1999 compared to an operating loss of $0.5 million for the three months ended
March 31, 1998, an increase of $4.9 million. The aforementioned cost cutting
measures and improvements at Conover are the primary causes of the improvement
in operating income.
Net Loss
The first-quarter net loss decreased to $2.0 million from $6.8 million in the
prior year.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary source of liquidity is cash flow from operations and
borrowings under a revolving credit facility. Pursuant to its operating
strategy, the Company maintains minimal to no cash balances and is substantially
dependent upon, among other things, the availability of adequate working capital
financing to support inventories and accounts receivable.
The Company's credit agreement provides for a $25.0 million revolving credit
facility, subject to a borrowing base formula, $1.9 million of which is reserved
for an irrevocable standby letter of credit. As of March 31, 1999, borrowings
on the line of credit were $5.5 million (unchanged from December 31, 1998) and
unused borrowing capacity under the Credit Agreement was $17.6 million. The
revolving credit facility matures in December 2002.
The Company is highly leveraged. At March 31, 1999, the Company's indebtedness
was $206.0 million and its stockholder's equity was a deficit of $153.5 million.
The Company's indebtedness contains certain restrictions which, among other
things, restrict its ability to incur additional indebtedness, issue preferred
stock, incur liens, pay dividends, make certain other restricted payments,
consummate certain asset sales, enter into certain transactions with affiliates,
merge or consolidate with any other person or sell, assign, transfer, lease,
convey or otherwise dispose of substantially all of its assets. In addition,
the Company's indebtedness contains certain financial covenants including
maintenance of a minimum level of earnings before interest, taxes, depreciation
and amortization ("EBITDA").
In February 1999, as anticipated at the time of the first amendment to the
Credit Agreement, the Company and its lenders entered into a second amendment to
the Credit Agreement which waived the financial covenants to which the Company
was subject through December 31, 1999 and established requirements with respect
to the maintenance of a minimum level of EBITDA for the four consecutive
quarters ending March 31, 1999, June 30, 1999, September 30, 1999, and December
31, 1999. The amendment also provides for a revised limitation on capital
spending. The Company was in compliance with the terms of its indebtedness as of
March 31, 1999.
8
<PAGE>
Interest payments on the Senior Secured Notes and Senior Subordinated Notes are
required during 1999 as follows: $5.6 million in April; $6.0 million in July;
and $5.6 million in October. The Senior Secured Notes and the Senior
Subordinated Notes mature as follows: $100 million in January 2003 and $100
million in October 2005.
The Company receives substantial ongoing financial and management services from
American Industrial Partners ("AIP"), an affiliate of the majority owners of the
Company's stockholder. AIP has deferred cash payments with respect to the
management fees it charges the Company; however, the accrual of such fees will
continue.
Cash Flow From Operating Activities
Cash flow from operating activities for the first quarter of 1999 remained
unchanged from the first quarter of 1998 at $0.9 million, despite the $4.8
million decrease in the net loss. This was primarily the result of cash
payments for interest in connection with the then recently refinanced debt which
were significantly less than interest accrued in the first quarter of 1998.
During the first quarter of 1999, cash payments for interest approximated
interest accrued in the period.
Cash Flow From Investing Activities
Cash used in investing activities was $0.8 million for the first quarter of 1999
compared to $1.8 million for the first quarter of 1998. This decrease was due
entirely to a reduction in capital expenditures in the first quarter of 1999
relative to the first quarter of 1998.
Cash Flow From Financing Activities
Cash used in financing activities increased to $0.1 million in the first quarter
of 1999 from cash provided of $0.9 million in the first quarter of 1998. For
the three months ended March 31, 1999, the Company borrowed $5.0 million and
paid back $5.0 million on the revolving credit facility.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
Adjusted earnings before interest, taxes, depreciation and amortization
("Adjusted EBITDA"), increased to $6.9 million for the three months ended March
31, 1999, from $3.3 million for the comparable period in 1998, an increase of
$3.6 million.
On a twelve-month-trailing basis, Adjusted EBITDA was $22.4 million as of March
31, 1999.
Management believes EBITDA is one indicator of a company's liquidity; however,
EBITDA, as presented above, may not be comparable to similarly titled measures
of other companies unless such measures are calculated in substantially the same
fashion. The Company believes that EBITDA, while providing useful information,
does not represent cash available to service debt and that it should not be
considered in isolation or as a substitute for the consolidated statement of
operations prepared in accordance with generally accepted accounting principles.
For example, EBITDA should not be considered an alternative to net income as an
indicator of operating performance or an alternative to the use of cash flows as
a measure of liquidity. Moreover, EBITDA does not reflect, as does cash flow
from operations, the cash needed to support changes in working capital.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
The information herein may include "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. All statements, other than statements of
historical facts included herein, regarding the Company's financial position,
business strategy and cost cutting plans may constitute forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to be correct. Actual results could differ
materially from the
9
<PAGE>
Company's expectations. Information on significant potential risks and
uncertainties not discussed herein may be found in the Company's filings with
the Securities and Exchange Commission.
YEAR 2000
INTRODUCTION
The arrival of the Year 2000 poses a unique challenge to all enterprises which
depend on computers, computer software and other equipment including machinery
and equipment utilizing microprocessors in conducting their normal operations.
As the Year 2000 approaches, such systems may become unable to function properly
or may even fail completely as the result of programming which recognizes dates
using only two digits rather than four. Consequently, operations could be
disrupted or temporarily halted if the deficiencies in such systems are not
corrected in a timely manner. Operations could also be disrupted or temporarily
halted if raw materials suppliers or service providers are not prepared and as a
result of Year 2000 become unable to supply materials or provide services.
Additionally, there could be a reduction in demand if customers are not prepared
for the Year 2000.
THE COMPANY'S STATE OF READINESS
The Company has undertaken a comprehensive assessment and corrective action
program designed to ensure that its essential information technology ("IT")
systems will appropriately recognize the Year 2000. Beginning in 1995, the
Company started a project to replace substantially all of its primary IT
systems. Management estimates that this project will be completed by the end of
the second quarter of 1999. Corrective action related to the Company's other
essential IT systems is also expected to be completed by the end of the second
quarter of 1999.
The Company is also performing an assessment of its non-IT systems. Non-IT
systems include systems utilizing embedded technology such as microcontrollers.
The manufacturing processes employed by the Company do not rely heavily on
embedded technology; however, the Company is working with its suppliers of
machinery and equipment to ensure that the manufacturing process is not halted
by such equipment as the Year 2000 approaches.
The Company is currently evaluating the Year 2000 readiness of its raw materials
suppliers and service providers to more fully assess the nature and magnitude
of the risk posed by its business partners. Management estimates that this
assessment will be completed by the end of the second quarter of 1999.
THE COSTS TO ADDRESS THE COMPANY'S YEAR 2000 ISSUES
The project to replace the Company's essential IT systems would have occurred
regardless of the existence of Year 2000 issues; however, the replacement
project is expected to provide Year 2000 readiness with respect to such systems.
The Company estimates capital expenditures of approximately $3.3 million in
connection with updating its primary IT systems, $2.7 million of which had been
spent as of March 31, 1999.
THE RISKS OF THE COMPANY'S YEAR 2000 ISSUES
The Company currently believes that its raw materials suppliers, service
providers and customers pose the greatest risk to operations as the Year 2000
approaches. The Company's manufacturing processes could be hampered or halted
altogether if raw materials are not available. Further, demand for the
Company's products could be adversely affected if the Company's customers are
not prepared for the advent of the Year 2000.
THE COMPANY'S CONTINGENCY PLANS
The Company has not completed the development of a formal contingency plan, but
expects to do so by the end of the second quarter of 1999. Any such plan will
likely include adjustment of production levels based on demand and the
availability of raw materials as well as the manual operation of equipment
ordinarily controlled by computer.
10
<PAGE>
CONCLUSION
The Company's assessment of the impact of Year 2000 issues and the related
timing associated with completion of efforts to resolve Year 2000 issues are
based on management's estimates, which were developed utilizing certain
assumptions with respect to future events. Based on these estimates and
assumptions, management believes it will achieve Year 2000 readiness in a timely
manner for essential IT systems. However, actual circumstances could differ
from those anticipated by management thereby altering the timetable for
completion, the effectiveness of implementation and the related costs of Year
2000 compliance programs.
11
<PAGE>
PART II
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Item
- ----------- ----------------------------------------------------------------
10.16 Amendment No. 2, Waiver and Agreement, dated as of February 19,
1999*.
27.1 Financial Data Schedule.
________________
* - Incorporated by reference to RBX Corporation's Annual Report on Form 10-K
for the year ended December 31, 1998, filed on March 31, 1999.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ending March 31, 1999.
12
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, each of the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
RBX CORPORATION
---------------
(Registrant)
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ John C. Cantlin Senior Vice President, Chief Financial Officer May 17, 1999
- ----------------------------------
JOHN C. CANTLIN and Treasurer
/s/ Thomas W. Tomlinson Corporate Controller May 17, 1999
- ----------------------------------
THOMAS W. TOMLINSON
</TABLE>
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 115
<SECURITIES> 0
<RECEIVABLES> 38,432
<ALLOWANCES> 1,727
<INVENTORY> 26,957
<CURRENT-ASSETS> 64,154
<PP&E> 96,439
<DEPRECIATION> 24,774
<TOTAL-ASSETS> 141,773
<CURRENT-LIABILITIES> 48,766
<BONDS> 205,663
0
0
<COMMON> 0
<OTHER-SE> (153,466)
<TOTAL-LIABILITY-AND-EQUITY> 141,773
<SALES> 64,421
<TOTAL-REVENUES> 64,421
<CGS> 53,451
<TOTAL-COSTS> 53,451
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</TABLE>
