<PAGE> 1
FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(MARK ONE)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Quarter Ended June 30, 1999
-------------
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: 333-15789
-------------------
ChemFirst Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Mississippi 64-0679456
- -----------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 North Street, Jackson, MS 39202-3095
- -----------------------------------------------------------------------------------
(Address of principal (Zip Code)
executive offices)
</TABLE>
Registrant's Telephone Number, including Area Code: 601/948-7550
---------------------
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 [ ]
Class Outstanding at July 31, 1999
- -------------------------- ----------------------------
Common Stock, $1 Par Value 18,115,810
<PAGE> 2
Part I. Financial Information
Item 1. Financial Statements
ChemFirst Inc.
Consolidated Balance Sheets (Unaudited)
(In Thousands of Dollars)
<TABLE>
<CAPTION>
June 30 December 31
1999 1998
--------- -----------
<S> <C> <C>
Assets:
Current assets
Cash and cash equivalents $ 4,979 11,226
Accounts receivable 56,125 43,798
Inventories:
Finished products 36,705 32,872
Work in process 5,228 7,045
Raw materials and supplies 9,788 11,378
--------- ---------
Total inventories 51,721 51,295
--------- ---------
Prepaid expenses and other current assets 9,204 8,274
Net current assets of discontinued operations 37,249 46,309
--------- ---------
Total current assets 159,278 160,902
--------- ---------
Investments and other assets 18,027 49,131
Property, plant and equipment 377,484 366,814
Less: accumulated depreciation and amortization 151,580 139,413
--------- ---------
Property, plant and equipment, net 225,904 227,401
Noncurrent assets of discontinued operations 6,000 6,000
--------- ---------
$ 409,209 443,434
========= =========
Liabilities and Stockholders' Equity:
Current liabilities
Notes payable $ 7,713 5,354
Current installments of long-term debt 238 251
Deferred revenue 563 104
Accounts payable 13,185 22,020
Accrued expenses and other current liabilities 16,755 16,237
--------- ---------
Total current liabilities 38,454 43,966
--------- ---------
Long-term debt 32,551 64,956
Deferred revenue and other liabilities 26,809 24,783
Deferred income taxes 16,771 13,501
Noncurrent liabilities of discontinued operations 10,097 10,097
Minority interest 649 649
Stockholders' equity:
Common stock 18,100 18,445
Additional paid-in capital 22,970 22,212
Retained earnings 243,111 245,118
Accumulated other comprehensive income (303) (293)
--------- ---------
Total stockholders' equity 283,878 285,482
--------- ---------
$ 409,209 443,434
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 3
ChemFirst Inc.
Consolidated Statements of Operations (Unaudited)
(In Thousands of Dollars and Shares, Except Per Share Amounts)
<TABLE>
<CAPTION>
3 Months Ended 6 Months Ended
June 30 June 30
------------------- -------------------
1999 1998 1999 1998
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues:
Sales $80,341 75,688 150,185 147,612
Interest and other income 1,023 1,067 3,155 10,639
------- ------- ------- -------
81,364 76,755 153,340 158,251
------- ------- ------- -------
Costs and expenses:
Cost of sales 58,202 56,405 108,552 110,076
General, selling and
administrative expenses 10,846 10,904 21,247 20,747
Other operating expenses 2,950 2,779 5,741 5,333
Interest expense 538 401 1,486 471
------- ------- ------- -------
72,536 70,489 137,026 136,627
------- ------- ------- -------
Earnings before income taxes 8,828 6,266 16,314 21,624
Income tax expense 3,355 2,413 6,200 8,325
------- ------- ------- -------
Earnings from continuing operations 5,473 3,853 10,114 13,299
Earnings from discontinued operations, net of taxes -- 101 -- 408
------- ------- ------- -------
Net earnings $ 5,473 3,954 10,114 13,707
======= ======= ======= =======
Earnings per common share:
Continuing operations $ 0.30 0.19 0.55 0.67
Discontinued operations -- 0.01 -- 0.02
------- ------- ------- -------
Net earnings $ 0.30 0.20 0.55 0.69
======= ======= ======= =======
Average shares outstanding 18,255 19,494 18,323 19,690
Earnings per common share, assuming dilution:
Continuing operations $ 0.30 0.19 0.55 0.67
Discontinued operations -- 0.01 -- 0.02
------- ------- ------- -------
Net earnings $ 0.30 0.20 0.55 0.69
======= ======= ======= =======
Average shares outstanding 18,500 19,789 18,518 19,998
Cash dividend declared
per share $ 0.10 0.10 0.20 0.20
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
ChemFirst Inc.
Consolidated Statements of Cash Flows (Unaudited)
(In Thousands of Dollars)
<TABLE>
<CAPTION>
June 30
----------------------
1999 1998
-------- --------
<S> <C> <C>
Cash flows from operations:
Net earnings $ 10,114 13,707
Adjustments to reconcile net earnings to
net cash provided by operations:
Depreciation and amortization 13,097 11,760
Provision for losses on receivables 86 26
Gain on sale of equity investee (750) (8,269)
Deferred taxes and other items 6,613 7,396
Change in current assets and liabilities, net
of effects of dispositions (20,180) (10,755)
Net earnings from discontinued operations -- (408)
-------- --------
Net cash provided by continuing operations 8,980 13,457
Net cash provided by (used in) discontinued operations 9,061 (11,498)
-------- --------
Net cash provided by operating activities 18,041 1,959
-------- --------
Cash flows from investing activities:
Capital expenditures (11,442) (22,761)
Proceeds from sale of equity investee -- 18,986
Proceeds from collection of note 29,569 --
Other investing activities (32) 607
-------- --------
Net cash provided by (used in) investing activities, continuing operations 18,095 (3,168)
Net cash used in investing activities, discontinued operations -- (1,354)
-------- --------
Net cash provided by (used in) investing activities 18,095 (4,522)
-------- --------
Cash flows from financing activities:
Net borrowings of notes payable (30,182) 35,000
Principal repayments of long-term debt -- (711)
Dividends (3,652) (3,917)
Purchase of common stock (8,866) (28,086)
Proceeds from issuance of common stock 326 831
-------- --------
Net cash provided by (used in) financing activities, continuing operations (42,374) 3,117
Net cash used in financing activities, discontinued operations -- (293)
-------- --------
Net cash provided by (used in) financing activities (42,374) 2,824
-------- --------
Effect of exchange rate changes on cash (9) --
-------- --------
Net increase (decrease) in cash and cash equivalents (6,247) 261
Cash and cash equivalents at beginning of period 11,226 7,766
-------- --------
Cash and cash equivalents at end of period $ 4,979 8,027
======== ========
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest, net of amounts capitalized $ 1,475 474
======== ========
Income taxes, net $ 1,715 3,651
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
ChemFirst Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited. In Thousands of Dollars)
Note 1 - General
The financial statements included herein are unaudited and have been
prepared in accordance with generally accepted accounting principles for interim
financial reporting and Securities and Exchange Commission regulations. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. Certain prior year
amounts have been reclassified to conform to the 1999 presentation. In the
opinion of management, the financial statements reflect all adjustments (of a
normal and recurring nature) which are necessary to present fairly the financial
position, results of operations and cash flows for the interim periods. These
financial statements should be read in conjunction with the Annual Report of the
Company and Form 10-K for the year ended December 31, 1998.
Note 2 - Discontinued Operations
The net assets and liabilities of discontinued operations included in
the consolidated financial statements are classified as current assets,
noncurrent assets and noncurrent liabilities at June 30, 1999 and December
31,1998, respectively, as follows:
<TABLE>
<CAPTION>
Engineered Products
and Services
Steel and Other Totals
------- ------------------- -------
<S> <C> <C> <C>
At June 30, 1999:
- -----------------
Net current assets of disc. operations $20,791 16,458 37,249
======= ====== ======
Noncurrent assets of disc. operations $ -- 6,000 6,000
======= ====== ======
Noncurrent liabilities of disc. operations $ -- 10,097 10,097
======= ====== ======
At December 31, 1998:
- ---------------------
Net current assets of disc. operations $26,565 19,744 46,309
======= ====== ======
Noncurrent assets of disc. operations $ -- 6,000 6,000
======= ====== ======
Noncurrent liabilities of disc. operations $ -- 10,097 10,097
======= ====== ======
</TABLE>
2
<PAGE> 6
The statements of operations have been reclassified to separate
discontinued and continuing operations. Earnings (loss) from discontinued
operations includes interest expense allocations, based on the ratio of net
assets of discontinued operations to consolidated net assets plus debt, of $58
and $68 for the three and six month periods ending June 30, 1998, respectively.
Revenues and net earnings (loss) of discontinued operations for the three and
six month periods ended June 30, 1998 were as follows:
<TABLE>
<CAPTION>
Engineered
Products
and Services
Three Months ended June 30, 1998: Steel and Other Totals
-------- ------------ ------
<S> <C> <C> <C>
Sales and revenues $ 18,726 19,114 37,840
======== ====== ======
Earnings (loss) from operations before taxes $ (221) 489 268
Income tax expense (benefit) (103) 270 167
-------- ------ ------
Earnings (loss) discontinued operations, net $ (118) 219 101
======== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Engineered
Products
and Services
Six Months ended June 30, 1998: Steel and Other Totals
-------- ------------ ------
<S> <C> <C> <C>
Sales and revenues $ 40,810 34,244 75,054
======== ====== ======
Earnings from operations before taxes $ 298 600 898
Income tax expense 163 327 490
-------- ------ ------
Earnings from discontinued operations, net $ 135 273 408
======== ====== ======
</TABLE>
Note 3 - Change from Reporting Gross Sales to Net Sales Basis
Beginning with calendar year 1999 the Company elected to present
sales on a net of freight basis by reclassing freight-out expense from cost of
sales to sales. Prior periods have been reclassified to consistently reflect
this presentation. Freight-out expense reclassed for the three and six month
periods ended June 30,1998 from cost of sales to net sales was $2,495 and
$4,744, respectively.
3
<PAGE> 7
Note 4 - Effect Of Adopting Accounting Changes
In March 1998, the Accounting Standards Executive Committee ("AcSEC")
released Statement of Position ("SOP") 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." The SOP identifies
the characteristics of internal-use software and provides guidance for
accounting treatment of costs for computer software developed or obtained for
internal use as related to capitalization or expense decisions. The statement
was effective for fiscal years beginning after December 15, 1998. In April 1998,
AcSEC released SOP 98-5, "Reporting on the Costs of Start-Up Activities." The
SOP broadly defines start-up activities and provides guidance on the financial
reporting of start-up costs and organization costs. It requires costs of
start-up activities and organization costs to be expensed as incurred. The
statement was effective for fiscal years beginning after December 15, 1998.
Information has been presented on the basis required by these two statements and
is immaterial to operations.
Statement of Financial Accounting Standards ("SFAS") No. 133 -
"Accounting for Derivative Instruments and Hedging Activities," was issued in
June 1998, effective for all fiscal quarters of all fiscal years beginning after
June 15, 1999. In June 1999, SFAS No.137 - "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of SFAS No.
133," was issued, amending the effective date to all fiscal quarters of all
fiscal years beginning after June 15, 2000. SFAS No. 133 establishes accounting
and reporting standards for derivative instruments and for hedging activities.
All derivatives are required to be recognized as either assets or liabilities in
the statement of financial position and measured at fair value. Changes in fair
value will be reported either in earnings or outside earnings depending on the
intended use of the derivative and the resulting designation. Entities applying
hedge accounting are required to establish at the inception of the hedge the
method used to assess the effectiveness of the hedging derivative and the
measurement approach for determining the ineffective aspect of the hedge. The
Company currently hedges certain foreign currency transactions by entering into
forward exchange contracts. Gains and losses associated with currency rate
changes on forward contracts hedging foreign currency transactions are recorded
in income and generally offset the transaction losses or gains on the foreign
currency cash flows that they are intended to hedge. The Company has not
completed its analysis of SFAS No. 133 and, accordingly, has not determined what
additional effect, if any, it may have on future operations and financial
statement disclosure.
4
<PAGE> 8
Note 5 - Earnings Per Share
Basic EPS is based on the average number of common shares
outstanding during each period. Diluted EPS includes the effect of outstanding
common stock equivalents ("CSEs"). The following is a reconciliation of the
numerators (income) and denominators (weighted-average shares) of the basic and
diluted per share computations for income from continuing operations:
<TABLE>
<CAPTION>
Three Months Ended June 30
1999 1998
----------------------- -----------------------
Income Shares EPS Income Shares EPS
------ ------ ----- ------ ------ -----
(Thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C>
Earnings per Common Share:
Basic $5,473 18,255 $0.30 $3,853 19,494 $0.19
Dilutive effect of CSEs -- 245 -- -- 295 --
------ ------ ----- ------ ------ -----
Diluted $5,473 18,500 $0.30 $3,853 19,789 $0.19
====== ====== ===== ====== ====== =====
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30
1999 1998
----------------------- ------------------------
Income Shares EPS Income Shares EPS
------- ------- ----- ------- ------- -----
(Thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C>
Earnings per Common Share:
Basic $10,114 18,323 $0.55 $13,299 19,690 $0.67
Dilutive effect of CSEs -- 195 -- -- 308 --
------- ------- ----- ------- ------- -----
Diluted $10,114 18,518 $0.55 $13,299 19,998 $0.67
======= ======= ===== ======= ======= =====
</TABLE>
Note 6 - Comprehensive Income
Total comprehensive income for the three months ended June 30, 1999
and 1998, was $5.5 million and $4.0 million, respectively. Comprehensive income
for the six months ended June 30, 1999 and 1998, was $10.1 million and $13.7
million, respectively. Total comprehensive income for the Company includes net
income and foreign currency translation adjustments.
5
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations - Six months ended June 30, 1999 compared to the six
months ended June 30, 1998
Consolidated Results
Earnings from continuing operations for the six months ended June 30, 1999, were
$10.1 million versus $13.3 million for the same period of the prior year. Prior
year results include a $5.0 million gain on the January 1998 sale of Power
Sources, Inc. Excluding the Power Sources gain, earnings from continuing
operations for the current year were up 23%, due to increased profits in the
Polyurethane Chemicals segment, which added the Baytown aniline facility in the
second quarter of 1998.
Segment Operations
Segment Information
(In Thousands of Dollars)
<TABLE>
<CAPTION>
6 Months Ended
June 30
-------
1999 1998
--------- -------
<S> <C> <C>
Sales:
Electronic and Other Specialty Chemicals $ 87,415 91,781
Polyurethane Chemicals 62,770 55,831
--------- -------
Total $ 150,185 147,612
========= =======
Operating profit before income taxes:
Electronic and Other Specialty Chemicals $ 7,841 9,997
Polyurethane Chemicals 15,245 7,879
--------- -------
23,086 17,876
Unallocated corporate expenses (5,881) (5,102)
Interest income (expense), net (663) 654
Other income (expense), net (228) 8,196
--------- -------
Total $ 16,314 21,624
========= =======
</TABLE>
6
<PAGE> 10
Electronic and Other Specialty Chemicals pretax operating profits for the
current year were down 22% versus the same period of the prior year to $7.8
million, while sales declined 5%. The decline in operating profits and sales was
primarily due to lower average prices for electronic chemicals. Higher costs
from recent investments in new facilities in the U.S., Europe and Japan also
negatively impacted current year operating results.
Polyurethane Chemicals pretax operating profits for the current year were
up 93% versus the same period of the prior year to $15.2 million, primarily due
to additional aniline volume from the new Baytown, TX plant which came on stream
in the second quarter of last year. Also, prior year results were hurt by higher
expenses, primarily the result of plant maintenance in the first and second
quarter at the Pascagoula facility. Sales for the year were up 12% due to the
addition of Baytown production.
Unallocated corporate expenses for the current year were $5.9 million
versus $5.1 million in the prior year, due to increased compensation expense
indexed to the Company's stock price and higher health care costs. Net interest
expense for the current year was $0.7 million versus net interest income of $0.7
million in the prior year due to $1.0 million in higher net interest expense
caused by increased borrowings and lower capitalized interest. Other income and
expense for the prior year included $8.2 million in pretax gain from the sale of
Power Sources, Inc.
7
<PAGE> 11
Results of Operations - Three months ended June 30, 1999 compared to the three
months ended June 30, 1998
Consolidated Results
Earnings from continuing operations for the three months ended June 30,
1999, were $5.5 million, up 42% from $4.0 million for the same period of the
prior year. The earnings improvement was due to higher sales of polyurethane
chemicals from the Baytown, TX aniline facility and higher production and lower
cost at the Pascagoula, MS aniline plant.
Segment Operations
Segment Information
(In Thousands of Dollars)
<TABLE>
<CAPTION>
3 Months Ended
June 30
-------
1999 1998
-------- --------
<S> <C> <C>
Sales:
Electronic and Other Specialty Chemicals $ 47,498 43,444
Polyurethane Chemicals 32,843 32,244
-------- --------
Total $ 80,341 75,688
======== ========
Operating profit before income taxes:
Electronic and Other Specialty Chemicals $ 4,302 4,367
Polyurethane Chemicals 8,040 4,724
-------- --------
12,342 9,091
Unallocated corporate expenses (3,057) (2,929)
Interest income (expense), net (197) 146
Other expense, net (260) (42)
-------- --------
Total $ 8,828 6,266
======== ========
</TABLE>
Electronic and Other Specialty Chemicals pretax operating profits for the
current year were $4.3 million, about the same as last year. Operating profits
remained flat as improvements in custom manufacturing operations were offset by
lower margins in electronic chemicals and higher fixed costs from manufacturing
and other infrastructure investments in the U.S., Europe and Japan. Sales for
the quarter were up 9%, primarily due to higher prices for other specialties.
8
<PAGE> 12
Polyurethane Chemicals pretax operating profits for the current year were
$8.0 million, up 70% versus the same quarter of the prior year due to additional
aniline production from the Baytown and Pascagoula facilities. Sales for the
quarter were up only slightly, however, as the increased aniline production
replaced low margin aniline purchased for resale in the prior year.
Unallocated corporate expenses for the current year were $3.1 million, up
slightly from $2.9 million in the prior year. Net interest expense for the
current year was $0.2 million versus net interest income of $0.1 million in the
prior year, primarily due to higher interest expense caused by increased
borrowings.
Discontinued Operations
Earnings from discontinued operations include the results of Steel and
Engineered Products and Services. The Company adopted plans for disposal of
these operations in the third and fourth quarters of 1998. Melt operations at
FirstMiss Steel ceased on June 30, as planned. Limited operations continue in
order to honor remaining contracts, sell inventories and collect receivables.
The company has terminated negotiations to sell Engineered Products and Services
to the managers of that business and is now actively seeking another buyer.
Capital Resources and Liquidity
Cash flow from continuing operations for the current year was $9.0 million,
down from $13.5 million in the prior year primarily due to increased accounts
receivable. Capital expenditures during the current year were down 50% from the
prior year, which included final expenditures on the Baytown, TX facility. Net
cash provided by investing activities in the current year included $29.6 million
from the collection of the Company's note with Getchell Gold. These proceeds
were used to reduce outstanding borrowings. Prior year investing activities
includes $19.0 million in pretax proceeds from the Company's sale of its
interest in Power Sources, Inc.
Year 2000
In 1996, the Company began a study which led to the purchase in 1997 of a
company-wide Enterprise Resource Planning ("ERP") system to integrate the
Company's information systems, replacing small, stand-alone purchased systems.
The ERP system will be Year 2000 compliant, with the material portion of the
system planned for completion by September 30, 1999. As of June 30, 1999, the
Company has spent $9.5 million on this project and is projecting to spend
approximately $2.1 million for the remainder of 1999.
9
<PAGE> 13
A corporate-wide survey and assessment of other information technology
("IT") and non-IT equipment and systems utilizing date or time functions has
been completed. The current estimated cost to perform necessary remediations is
less than $0.4 million of which approximately $0.1 million has been spent to
date. Most of this cost is related to process control systems, the majority of
which have now been remediated and successfully tested. Implementation and
testing of process control remediations at the Pascagoula facility will not
occur until October 1999 to coincide with the next scheduled plant maintenance
turnaround. Contingency plans, scheduled for completion at September 30, 1999,
are currently being developed in the event the remediations are not successful
or the remaining remediations do not occur or are delayed. Severe delay or
widespread failure affecting both the remediation effort and the contingency
plans, although not expected, could have a material effect on the Company's
financial condition and results of operations.
Although monitoring will continue, the Company has essentially completed
its assessment of critical key customers, as well as service and raw material
suppliers, regarding their Year 2000 readiness. Contingency plans are being
developed, as appropriate, in a process scheduled for completion by September
30, 1999, addressing potential shortfalls related to Year 2000 readiness with
respect to individual critical key suppliers and customers. Although the Company
cannot quantify the precise effect, significant or prolonged disruptions of key
customers or suppliers could have a material effect on the Company's financial
condition and results of operations. The Company has not finalized its
determination of its most likely worse case scenario in the event of Year 2000
related problems, but will do so by October 31, 1999, to encompass the final
anticipated process control systems remediations and ERP site implementations.
However, based on information to date and assuming no major disruptions by
critical third parties or delays in remaining remediations and ERP
implementations, the Company believes that the most likely worst case scenario
would involve temporary interruptions in manufacturing capability and that
these should not have a material adverse effect on the Company's financial
position, operations or cash flow.
Forward-Looking Statements
Certain statements included in this Form 10-Q which relate to the Year
2000, proceeds from the discontinuance of the steel and engineered products and
services operations, as well as, other statements in this Form 10-Q that are not
historical in nature, may constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements, as well as other forward-looking statements made
from time to time by the Company, or in the Company's press releases and filings
with the U.S. Securities and Exchange Commission, are based on certain
underlying assumptions and expectations of management. These forward-looking
statements are subject to risks and uncertainties which could cause actual
results to differ materially from those expressed in such forward-looking
statements. Such risks and uncertainties include, but are not limited to,
general economic conditions, availability and pricing of raw materials,
supply/demand balance for key products, new product development, manufacturing
efficiencies, conditions of and product demand by key
10
<PAGE> 14
customers, the timely completion and start up of construction projects, pricing
pressure as a result of the downturn in Asian or other foreign markets,
successful installation of the Company's ERP system, the inability of the
Company to either resolve its Year 2000 issues or to accurately estimate the
costs associated with Year 2000 compliance and other factors as may be discussed
in the company's Form 10-K for the fiscal year ended December 31, 1998.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to changes in financial market conditions in the
normal course of its business, including changes in interest rates and foreign
currency exchange rates. At June 30, 1999, the Company's derivative and other
financial instruments included long-term debt denominated in U.S. dollars and
short-term debt denominated in Japanese yen and a series of short-term forward
sales of Japanese yen. Due to the short-term nature and size of these yen
obligations, the Company does not consider its exposure to foreign currency or
interest rate fluctuations on these instruments to be material.
The Company utilizes fixed and variable-rate debt to maintain liquidity and
fund its business operations, with the terms and amounts based on business
requirements, market conditions and other factors. At June 30,1999, the market
value of the Company's fixed rate borrowings was approximately $24.0 million. A
100 basis point change in interest rates (all other variables held constant) as
of June 30,1999, would result in an approximate $0.7 million change in fair
market value, but would not affect interest expense or cash flow. At June
30,1999, the Company had $16.3 million in variable-rate debt. A 100 basis point
change in interest rates (all other variables held constant) on this portion of
the Company's debt would result in a change in interest expense of approximately
$0.2 million.
11
<PAGE> 15
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders on May 25, 1999, the Company
stockholders, pursuant to proxies solicited under Regulation 14A, elected four
directors for terms to expire in 2002, or until their successors are elected and
qualify. The following votes were cast:
<TABLE>
<S> <C> <C>
James E. Fligg 16,248,577 shares voted for
-----------
53,670 shares withheld
-----------
Robert P. Guyton 16,247,827 shares voted for
-----------
54,420 shares withheld
-----------
Paul W. Murrill 16,237,753 shares voted for
-----------
64,494 shares withheld
-----------
J. Kelley Williams 16,247,021 shares voted for
-----------
55,226 shares withheld
-----------
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
Exhibit 27.1 - Restated Financial Data Schedule
(b) Reports on Form 8-K
No report on Form 8-K was filed by the Registrant during the
three months ended June 30, 1999.
12
<PAGE> 16
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.
CHEMFIRST INC.
August 11, 1999 /s/ J. KELLEY WILLIAMS
- ---------------------- -----------------------------------------
Date J. Kelley Williams
Chairman and Chief Executive Officer
August 11, 1999 /s/ TROY B. BROWNING
- ---------------------- -----------------------------------------
Date Troy B. Browning
Controller (Principal Accounting Officer)
13
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS
NUMBER DESCRIPTION
- -------- -----------
<S> <C>
27 - Financial Data Schedules
27.1 - Restated Financial Data Schedules
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 4,979
<SECURITIES> 0
<RECEIVABLES> 56,188
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