<PAGE>
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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 26, 1999
[ ] 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)
<TABLE>
<S> <C>
Delaware 23-2674715
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Three Radnor Corporate Center, Suite 300
100 Matsonford Road, Radnor, Pennsylvania 19087
(address of principal executive offices) (Zip Code)
</TABLE>
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 [ ]
The number of shares outstanding of the Registrant's common stock as of
May 5, 1999:
Number
Class 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
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<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
March 26, December 25,
1999 1998
--------------- ---------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 1,772 $ 3,975
Marketable securities 527 546
Accounts receivable, net 29,914 28,655
Inventories, net 35,806 35,267
Prepaid expenses and other 6,199 4,075
Deferred tax asset 2,258 2,255
--------------- ---------------
Total current assets 76,476 74,773
--------------- ---------------
PROPERTY, PLANT AND EQUIPMENT 214,252 203,913
LESS - ACCUMULATED DEPRECIATION (25,212) (22,536)
--------------- ---------------
NET PROPERTY, PLANT AND EQUIPMENT 189,040 181,377
--------------- ---------------
OTHER ASSETS 22,032 22,646
--------------- ---------------
Total assets $ 287,548 $ 278,796
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $26,143 $28,756
Accrued liabilities 23,596 20,618
Current portion of long-term debt and capitalized
lease obligations 2,826 1,490
--------------- ---------------
Total current liabilities 52,565 50,864
--------------- ---------------
LONG-TERM DEBT, net of current portion 202,062 189,653
--------------- ---------------
CAPITALIZED LEASE OBLIGATIONS, net of current portion 5,095 4,855
--------------- ---------------
DEFERRED TAX LIABILITY 11,134 11,839
--------------- ---------------
OTHER NONCURRENT LIABILITIES 684 636
--------------- ---------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Voting and nonvoting common stock, 22,700 shares
authorized, 6,245 shares issued and outstanding 1 1
Additional paid-in capital 19,387 19,387
Retained earnings (211) 1,087
Cumulative translation adjustment (3,169) 474
--------------- ---------------
Total stockholders' equity 16,008 20,949
--------------- ---------------
Total liabilities and stockholders' equity $ 287,548 $ 278,796
=============== ===============
The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
2
<PAGE>
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
For the three months ended
---------------------------------------------
March 26, March 27,
1999 1998
------------- -------------
<S> <C> <C>
Net sales $67,752 $71,814
Cost of goods sold 49,152 52,785
------------- -------------
Gross profit 18,600 19,029
Operating expenses:
Distribution 5,037 5,173
Selling, general and administrative 10,191 8,526
------------- -------------
Income from operations 3,372 5,330
Other (income) expense:
Interest 5,021 4,559
Other, net 414 (281)
------------- -------------
Income (loss) before income taxes (2,063) 1,052
Provision (benefit) for income taxes:
Current (127) 78
Deferred (638) 322
------------- -------------
(765) 400
------------- -------------
Net income (loss) $(1,298) $ 652
============= =============
The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
3
<PAGE>
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
For the three months ended
-------------------------------------
March 26, March 27,
1999 1998
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(1,298) $ 652
Adjustments to reconcile net income to cash used
in operating activities-
Depreciation 3,024 2,441
Amortization 1,017 511
Unrealized loss on marketable securities 19 -
Deferred income taxes (638) 322
Changes in operating assets and liabilities
Accounts receivable, net (1,828) (3,562)
Inventories, net (1,218) (6,359)
Prepaid expenses and other (2,245) (1,280)
Accounts payable (2,354) (944)
Accrued liabilities 3,321 3,160
------------- -------------
Net cash used in operating activities (2,200) (5,059)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (6,015) (4,763)
Increase in other assets (505) (1,436)
------------- -------------
Net cash used in investing activities (6,520) (6,199)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings on bank financed debt and
unsecured notes payable 6,724 6,105
Net payments on capitalized lease obligations (183) -
------------- -------------
Net cash provided by financing activities 6,541 6,105
------------- -------------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH (24) (280)
------------- -------------
NET DECREASE IN CASH (2,203) (5,433)
CASH, beginning of period 3,975 8,810
------------- -------------
CASH, end of period $ 1,772 $ 3,377
============= =============
SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest paid $ 465 $ 238
============= =============
Income taxes paid $ 160 $ -
============= =============
The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
4
<PAGE>
RADNOR HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION
The condensed consolidated financial statements included herein have been
prepared by Radnor Holdings Corporation and subsidiaries (collectively,
"Radnor" or the "Company") pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in consolidated financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. In the opinion
of the Company, the statements include all adjustments (which include only
normal recurring adjustments) required for a fair statement of financial
position, results of operations and cash flows for such periods. The
results of operations for the interim periods are not necessarily
indicative of the results for a full year.
(2) INVENTORIES
The components of inventories were as follows (in thousands):
<TABLE>
<CAPTION>
March 26, December 25,
1999 1998
-------- -----------
<S> <C> <C>
Raw Materials $12,107 $12,576
Work in Process 1,195 1,251
Finished Goods 22,504 21,440
------- -------
$35,806 $35,267
======= =======
</TABLE>
(3) INTEREST EXPENSE
Included in interest expense is $391,000 and $277,000 of amortization of
deferred financing costs for the three months ended March 26, 1999 and
March 27, 1998, respectively. Premium amortization of $78,000 and $70,000
related to the issuance of the Company's 10% Series B Senior Notes due 2003
is also included in interest expense for the three months ended March 26,
1999 and March 27, 1998, respectively.
(4) COMPREHENSIVE INCOME
Comprehensive income is the total of net income (loss) and non-owner
changes in equity. For the three months ended March 26, 1999 and March 27,
1998 the Company had comprehensive losses as follows (in thousands):
<TABLE>
<CAPTION>
March 26, March 27,
1999 1998
------- -------
<S> <C> <C>
Net Income (Loss) $(1,298) $ 652
Foreign Currency Translation Adjustment (3,643) (1,473)
------- -------
Comprehensive Loss $(4,941) $ (821)
======= =======
</TABLE>
5
<PAGE>
(5) SEGMENT INFORMATION
SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information," requires the use of a segment reporting model called the
management approach. The management approach is based on the way that the
chief operating decision maker organizes segments within a company for
making operating decisions and assessing performance.
The Company has two business segments that operate within three distinct
geographic regions. The packaging and insulation segment produces food
packaging and insulation products for distribution to the foodservice,
insulation and packaging industries. The specialty chemicals segment
produces EPS for internal consumption by the packaging and insulation
segment in addition to selling to third-party manufacturers. Each of these
segments operates in the United States, Canada and Europe. The following
tables summarize the Company's financial information and results of
operations by segment and geographic region for the three months ended
March 26, 1999 and March 27, 1998.
Operating:
<TABLE>
<CAPTION>
Three Months Ended Packaging and Specialty Corporate
March 26, 1999 Insulation(1) Chemicals(1) and Other Eliminations Consolidated
- ---------------------------- -------------- ------------ --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Sales to Unaffiliated
Customers $ 50,022 $17,337 $ 393 $ -- $ 67,752
Transfers Between Operating
Segments -- 3,728 -- (3,728) --
Operating Income (Loss) 6,245 (1,609) (1,264) -- 3,372
Income (Loss) Before Income
Taxes 3,137 (2,343) (2,857) -- (2,063)
Identifiable Assets 178,445 85,465 23,638 -- 287,548
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended Packaging and Specialty Corporate
March 27, 1998 Insulation(1) Chemicals(1) and Other Eliminations Consolidated
- ---------------------------- -------------- ------------ --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Sales to Unaffiliated
Customers $ 48,069 $23,745 $ -- $ -- $ 71,814
Transfers Between Operating
Segments -- 2,937 -- (2,937) --
Operating Income (Loss) 4,609 2,139 (1,418) -- 5,330
Income (Loss) Before Income
Taxes 1,809 1,634 (2,391) -- 1,052
Identifiable Assets 159,417 86,176 11,476 -- 257,069
</TABLE>
(1) Amounts reflect the transfer of the EPS production operations in Minton,
Texas from the Company's Radnor Chemical subsidiary to its WinCup subsidiary.
6
<PAGE>
(5) SEGMENT INFORMATION (continued)
Geographic:
<TABLE>
<CAPTION>
Three Months Ended United
March 26, 1999 States Canada Europe Eliminations Consolidated
- ------------------------------ ----------- -------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Sales to Unaffiliated
Customers $50,030 $3,272 $14,450 $ -- $67,752
Transfers Between Geographic
Segments -- 1,522 -- (1,522) --
Operating Income (Loss) 3,537 391 (556) -- 3,372
Income (Loss) Before Income
Taxes (173) 111 (2,001) -- (2,063)
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended United
March 27, 1998 States Canada Europe Eliminations Consolidated
- ------------------------------ ----------- -------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Sales to Unaffiliated
Customers $49,432 $4,501 $17,881 $ -- $71,814
Transfers Between Geographic
Segments -- 672 -- (672) --
Operating Income 3,219 892 1,219 -- 5,330
Income (Loss) Before Income
Taxes (930) 611 1,371 -- 1,052
</TABLE>
7
<PAGE>
(6) SUPPLEMENTAL FINANCIAL INFORMATION
Radnor Holdings Corporation is a holding company that has no operations
separate from its investment in subsidiaries. The Company's $100 million
10% Senior Notes due 2003 and $60 million 10% Series B Senior Notes due
2003 are guaranteed by substantially all of the Company's domestic
subsidiaries. The following represents summarized combining financial
information of the holding company, combined guarantor subsidiaries and the
combined non-guarantor subsidiaries as of and for the three months ended
March 26, 1999 and March 27, 1998 (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Holding Guarantor Non-Guarantor
March 26, 1999 Company Subsidiaries Subsidiaries Eliminations Consolidated
- ----------------------------- ------------- ------------ ------------------ --------------- ----------------
<S> <C> <C> <C> <C> <C>
Net Sales $ -- $ 50,030 $19,244 $ (1,522) $ 67,752
Gross Profit -- 14,281 4,319 -- 18,600
Operating Income (Loss) -- 3,537 (165) -- 3,372
Net Income (Loss) -- 595 (1,893) -- (1,298)
Current Assets 563 50,089 29,234 (3,410) 76,476
Noncurrent Assets 144,786 205,195 51,650 (190,559) 211,072
Current Liabilities 5,096 34,228 17,093 (3,852) 52,565
Noncurrent Liabilities 161,784 98,833 57,028 (98,670) 218,975
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended Holding Guarantor Non-Guarantor
March 27, 1998 Company Subsidiaries Subsidiaries Eliminations Consolidated
- ----------------------------- ------------- ------------ ----------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Net Sales $ -- $ 49,432 $23,054 $ (672) $ 71,814
Gross Profit -- 12,804 6,225 -- 19,029
Operating Income -- 3,520 1,810 -- 5,330
Net Income -- 1,081 777 (1,206) 652
Current Assets 1,364 48,507 31,961 (5,894) 75,938
Noncurrent Assets 151,065 179,519 46,693 (196,146) 181,131
Current Liabilities 5,134 28,864 16,843 (2,236) 48,605
Noncurrent Liabilities 162,089 67,953 56,542 (92,274) 194,310
</TABLE>
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General
- -------
Radnor Holdings Corporation, through acquisition and internal development, has
established itself as a leading worldwide manufacturer and distributor of
specialty chemicals and foam packaging and insulation products for the
foodservice, insulation and packaging industries.
The packaging and insulation business segment manufactures and distributes
foam cup and container products for the foodservice industry as well as a
variety of standard and specialized insulation products. Through its WinCup
Holdings, Inc. ("WinCup") subsidiary, the Company is the second largest producer
in the United States of foam cups and containers for the foodservice industry.
The specialty chemicals business segment primarily manufactures and distributes
expandable polystyrene ("EPS") bead for internal consumption and distribution to
the insulation and packaging industries. Through its Radnor Chemical Corporation
("Radnor Chemical") subsidiary, the Company is the fifth largest worldwide
producer of EPS.
Results of Operations
- ---------------------
In January 1999, the EPS production operations located in Minton, Texas
were transferred from the Company's Radnor Chemical subsidiary to its WinCup
subsidiary. This facility manufactures a substantial portion of the EPS utilized
by the Company's domestic food packaging operations with the remainder purchased
from Radnor Chemical's Canadian EPS manufacturing facility. The Company's
results of operations for the three months ended March 27, 1998 have been
restated to reflect the impact of this transaction for purposes of Management's
Discussion and Analysis of Financial Condition and Results of Operations.
CONSOLIDATED
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------------
(Millions of dollars) March 26, 1999 March 27, 1998
- ------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $67.8 $71.8
- ------------------------------------------------------------------------------------
Gross profit 18.6 19.0
- ------------------------------------------------------------------------------------
Operating expenses 15.2 13.7
- ------------------------------------------------------------------------------------
Income from operations 3.4 5.3
- ------------------------------------------------------------------------------------
</TABLE>
Net sales for the three months ended March 26, 1999 were $67.8 million. This
$4.0 million decrease from the three months ended March 27, 1998 was caused by
reductions in selling prices in the specialty chemicals segment, partially
offset by growth in the insulation and food packaging businesses. Gross profit
increased to 27.4% of net sales for the first quarter of fiscal 1999 from 26.5%
of net sales in the first quarter of fiscal 1998. This increase was caused by
improved manufacturing efficiencies and lower raw material costs, partially
offset by increased depreciation expense of $0.6 million and the impact of the
reduced specialty chemical selling prices. Operating expenses for the three
months ended March 26, 1999 increased to $15.2 million from $13.7 million for
the same period in 1998 primarily as a result of a $0.5 million increase in
amortization of intangible assets and increased operating costs in the
administrative operations.
9
<PAGE>
SEGMENT ANALYSIS
Packaging & Insulation
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------------
(Millions of dollars) March 26, 1999 March 27, 1998
- ------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $50.0 $48.1
- ------------------------------------------------------------------------------------
Gross profit 15.6 13.7
- ------------------------------------------------------------------------------------
Operating expenses 9.3 9.1
- ------------------------------------------------------------------------------------
Income from operations 6.3 4.6
- ------------------------------------------------------------------------------------
</TABLE>
Net sales in the packaging and insulation business segment increased
by $1.9 million to $50.0 million for the three months ended March 26, 1999.
This 4.0% increase over the three months ended March 27, 1998 was primarily due
to volume growth within both the insulation and food packaging businesses.
Gross profit increased to 31.2% of net sales for the three months ended March
26, 1999 from 28.5% of net sales for the same period in 1998 as a result of
improved manufacturing efficiencies and higher production levels. Operating
expenses decreased to 18.6% of net sales for the three months ended March 26,
1999 from 18.9% of net sales for the three months ended March 27, 1998 primarily
due to lower distribution costs within both the food packaging and insulation
packaging operations. Income from operations for the three months ended March
26, 1999 increased by $1.7 million or 37.0% over the same period in 1998 as a
result of the reasons described above.
Specialty Chemicals
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------
(Millions of dollars) March 26, 1999 March 27, 1998
- -------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $21.1 $26.7
- -------------------------------------------------------------------------------------
Gross profit 2.2 5.7
- -------------------------------------------------------------------------------------
Operating expenses 3.8 3.6
- -------------------------------------------------------------------------------------
Income (loss) from operations (1.6) 2.1
- -------------------------------------------------------------------------------------
</TABLE>
Net sales for the three months ended March 26, 1999 and March 27, 1998
included sales to the packaging and insulation segment of $3.7 million and $3.0
million, respectively. Net sales for the first quarter of fiscal 1999 decreased
to $21.1 million from $26.7 million for the same period in 1998. This $5.6
million decrease was primarily due to reductions in selling prices in both the
North American and European specialty chemicals businesses. These price
reductions were the combined result of lower underlying raw material prices and
excess supply in the North American and European EPS markets caused by increased
competition from Asian producers.
Gross profit decreased to 10.4% of net sales for the first quarter of fiscal
1999 as compared to 21.3% of net sales for the same period in 1998. This
decrease was primarily caused by the reduction in selling prices described
above, partially offset by lower raw material costs and increased manufacturing
efficiencies. Operating expenses increased $0.2 million to $3.8 million for the
three months ended March 26, 1999 as a result of increased distribution costs in
the European specialty chemicals business.
10
<PAGE>
Corporate & Other
Corporate operating expenses increased by $1.1 million to $2.1 million for the
three months ended March 26, 1999. This increase was primarily due to a $0.5
million increase in amortization of intangible assets and increased operating
costs at the Company's executive offices in Radnor, Pennsylvania.
Interest Expense
- ----------------
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------------
(Millions of dollars) March 26, 1999 March 27, 1998
- ------------------------------------------------------------------------------------
<S> <C> <C>
Interest expense $5.0 $4.6
- ------------------------------------------------------------------------------------
</TABLE>
Interest expense for the three months ended March 26, 1999 increased by $0.4
million over the same period in 1998. This increase was primarily due to
increased borrowings related to the purchase of the Company's Atlanta, Georgia
and Tolleson, Arizona food packaging plants in June 1998 and March 1999,
respectively. In addition, amortization of deferred financing fees and debt
issuance premium increased to $0.3 million for the three months ended March 26,
1999 from $0.2 million for the same period in 1998.
Income Taxes
- ------------
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------
(Millions of dollars) March 26, 1999 March 27, 1998
- -------------------------------------------------------------------------------------
<S> <C> <C>
Income tax expense (benefit) ($ 0.8) $0.4
- -------------------------------------------------------------------------------------
</TABLE>
The effective tax rate for the three months ended March 26, 1999 decreased to
37.1% of pre-tax income from 38.0% of pre-tax income for the same period in
1998. As of March 26, 1999 the Company had approximately $26.1 million of net
operating loss carryforwards for federal income tax purposes, which expire
through 2019.
Liquidity and Capital Resources
- -------------------------------
During the three months ended March 26, 1999 and March 27,1998, the Company's
principal source of funds consisted of cash from financing activities. During
the 1999 period, after tax cash flow of $2.1 million, borrowings on bank
financed debt of $6.7 million and a decrease in cash of $2.2 million were
primarily used to fund capital expenditures of $6.0 million and a $4.3 million
increase in working capital.
As of March 26, 1999, the Company had $24.7 million outstanding and $10.0
million of availability under its revolving credit agreements. The Company's
principal uses of cash for the next several years will be working capital
requirements and capital expenditures.
As a holding company, Radnor Holdings Corporation is dependent upon dividends
and other payments from its subsidiaries to generate the funds necessary to meet
its obligations. Subject to certain limitations under applicable state law and
the Company's credit agreements, Radnor Holdings Corporation is, and will
continue to be, able to control its receipt of dividends and other payments from
its subsidiaries. Management believes that cash generated from operations,
together with available borrowings under the revolving credit facilities, will
be sufficient to meet the Company's expected operating needs, planned capital
expenditures and debt service requirements.
11
<PAGE>
Other Financial Data
- --------------------
Year 2000 Readiness Disclosure
Many existing computer hardware and software systems use only the last two
digits to identify a year. As a result, many systems do not yet recognize the
difference between years beginning with "20" instead of "19". This, as well as
other date related processing issues, may cause systems to fail or malfunction
unless corrected.
The Company's current Year 2000 assessment is that some of its data processing
systems are generally not compliant. Some of these systems can easily be
updated or modified to be compliant, but several of the Company's systems cannot
be updated because of software or hardware limitations. The Company has begun
the process of replacing these systems with Year 2000 compliant data processing
systems. As of March 26, 1999 the Company had incurred approximately $100,000
in costs to upgrade or replace its noncompliant systems, including internal
costs for personnel, training, supplies, travel and equipment. The total cost
to upgrade or replace the Company's noncompliant systems is not expected to
exceed $400,000 and is expected to be funded through operations. The Company
has assessed its non-information technology systems and does not believe that
any Year 2000 noncompliance with respect to these systems will have a material
adverse effect on the Company's business, financial condition, cash flows or
results of operations.
In the event that any of the Company's operations remain Year 2000
noncompliant near the end of 1999, the Company plans to transfer the accounting
and information processing of those operations to the Company's systems that are
Year 2000 compliant. The Company estimates that the overall risk to its
operations as a result of noncompliance with Year 2000 for its existing systems
in a most likely worst case scenario is less than $250,000. There can be no
assurance, however, that this estimate represents the Company's maximum Year
2000 exposure.
The ability of third parties with which the Company transacts business to
adequately address their Year 2000 issues is outside of the Company's control.
The Company is taking steps to obtain written confirmations that the systems of
its suppliers and customers are Year 2000 compliant and to determine whether the
nature of any noncompliance would have a material adverse effect on the
Company's business, financial condition, cash flows or results of operations.
The Company anticipates this process will be completed no later than June 25,
1999, and will develop contingency plans, as necessary, based upon the results
of the confirmations.
Even assuming that all material third parties confirm that they are or expect
to be Year 2000 compliant by December 31, 1999, it is not possible to state with
certainty that such parties will be so compliant, or that the operations of such
third parties will not be materially impacted by other parties with whom they
themselves have a material relationship, and who fail to timely become Year 2000
compliant. Consequently, it is not possible to predict whether or to what
extent the Year 2000 issues may have an adverse material impact on the Company
as a result of their impact on the operations of third parties with whom the
Company has a material relationship.
There can be no assurance that the failure of the Company or such third
parties to adequately address their respective Year 2000 issues will not have a
material adverse effect on the Company's business, financial condition, cash
flows or results of operations.
Financial Instruments
There has been no material change in the net financial instrument position or
sensitivity to market risk since the disclosure in the annual report.
12
<PAGE>
Forward Looking Statements
- --------------------------
All statements contained herein that are not historical facts are based on
current expectations. These statements are forward looking in nature and
involve a number of risks and uncertainties. Such risks and uncertainties are
described in detail in the Company's Report on Form 10-K for the year ended
December 25, 1998, Commission File No. 333-19495, to which reference is hereby
made.
13
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company is involved in various legal actions arising in the normal
course of business. After taking into consideration legal counsel's
evaluation of such actions, management believes that these actions will
not have a material effect on the Company's financial position or
results of operations.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during the three month period
ended March 26, 1999.
14
<PAGE>
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, its duly authorized officer and chief financial officer.
RADNOR HOLDINGS CORPORATION
(registrant)
/s/ Michael V. Valenza
---------------------------------
Date: May 5, 1999 By:
Michael V. Valenza
Senior Vice President-Finance and
Chief Financial Officer
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM RADNOR
HOLDINGS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> DEC-26-1998
<PERIOD-END> MAR-26-1999
<CASH> 1,772
<SECURITIES> 527
<RECEIVABLES> 29,914
<ALLOWANCES> 0
<INVENTORY> 35,806
<CURRENT-ASSETS> 76,476
<PP&E> 214,252
<DEPRECIATION> (25,212)
<TOTAL-ASSETS> 287,548
<CURRENT-LIABILITIES> 52,565
<BONDS> 202,062
0
0
<COMMON> 1
<OTHER-SE> 16,007
<TOTAL-LIABILITY-AND-EQUITY> 287,548
<SALES> 67,752
<TOTAL-REVENUES> 67,752
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<INCOME-TAX> (765)
<INCOME-CONTINUING> (1,298)
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,298)
<EPS-PRIMARY> 0
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</TABLE>
