SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 December 31, 1995 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 1-5528
WEDCO TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-1689437
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 397 Bloomsbury, New Jersey 08804
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 908-479-4181
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report).
<PAGE>
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 / /
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at February 16, 1996
Common Stock, $.10 par value 3,567,785
<PAGE>
WEDCO TECHNOLOGY, INC. AND CONSOLIDATED SUBSIDIARIES
INDEX
Page No.
PART I. Financial Information:
Consolidated Balance Sheets - 1- 2
December 31, 1995 and March 31, 1995 (Unaudited)
Consolidated Statements of Income - For the Nine Months 3
and Three Months Ended December 31, 1995
and 1994 (Unaudited)
Consolidated Statement of Changes in Stockholders' Equity - 4
For the Nine Months Ended December 31, 1995 (Unaudited)
Consolidated Statements of Cash Flows - For the Nine Months 5
Ended December 31, 1995 and 1994 (Unaudited)
Notes to Consolidated Financial Statements (Unaudited) 6- 7
Management's Discussion and Analysis of Financial 8-12
Condition and Results of Operations
PART II. Other Information 13
Signatures 14
<PAGE>
<TABLE>
WEDCO TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND MARCH 31, 1995 (UNAUDITED)
<CAPTION>
ASSETS December 31, 1995 March 31, 1995
<S> <C> <C>
CURRENT ASSETS:
Cash $ 147,617 $ 1,039,760
Accounts receivable,
less allowance
for doubtful accounts of
$52,515 at December 31 and
$52,568 at March 31 6,069,631 7,960,327
Due from related parties
- current 599,758 760,686
Inventories 2,054,726 2,031,009
Prepaid expenses and other
current assets 1,019,534 990,303
Total current assets 9,891,266 12,782,085
PROPERTY, PLANT AND EQUIPMENT,
less accumulated depreciation
of $28,767,474 at December 31
and $26,324,868 39,027,797 37,217,297
at March 31
OTHER ASSETS:
Investment in joint ventures 4,779,402 4,801,795
Land 2,298,109 2,298,109
Due from related parties 779,151 833,987
Other 42,480 59,919
Total other assets 7,899,142 7,993,810
TOTAL $56,818,205 $57,993,192
</TABLE>
<PAGE>
<TABLE>
WEDCO TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND MARCH 31, 1995 (UNAUDITED)
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, 1995 March 31, 1995
<S> <C> <C>
CURRENT LIABILITIES:
Notes payable $ 3,718,266 $ 3,103,827
Current maturities of
long-term debt 1,646,524 1,761,020
Accounts payable 2,800,110 3,688,585
Accrued payroll 889,619 999,229
Accrued expenses 579,918 354,100
Accrual for environmental
cleanup 72,000 72,000
Federal, state and foreign
income taxes payable 730,579 903,841
Other current liabilities 1,281,472 1,166,260
Total current liabilities 11,718,488 12,048,862
LONG-TERM DEBT,
LESS CURRENT MATURITIES 14,871,959 15,721,787
ACCRUAL FOR
ENVIRONMENTAL CLEANUP 198,836 249,327
DEFERRED COMPENSATION 235,000 100,000
DEFERRED INCOME TAXES 2,419,671 2,762,546
STOCKHOLDERS' EQUITY:
Common stock - authorized
10,495,000 shares at
December 31 and
March 31, 1995;
issued 4,094,891
shares at December 31
and March 31, 1995 409,489 409,489
Additional paid-in capital 11,159,205 11,159,205
Retained earnings 17,434,016 16,740,328
Equity adjustment from
foreign currency
translation 1,649,901 2,080,008
Total 30,652,611 30,389,030
Less treasury stock -
at cost, 527,106 shares
at December 31 and
March 31, 1995 (3,278,360) (3,278,360)
Stockholders' equity - net 27,374,251 27,110,670
TOTAL $56,818,205 $57,993,192
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
WEDCO TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTHS
AND THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994 (UNAUDITED)
<CAPTION>
Nine Months Ended Three Months Ended
December 31 December 31
1995 1994 1995 1994
<S> <C> <C> <C> <C>
NET REVENUE $32,119,484 $31,843,057 $9,991,759 $11,548,212
OPERATING EXPENSES:
Costs of services rendered
and products sold 20,469,005 18,897,598 6,577,598 7,202,089
Selling, general and
administrative
expenses 5,966,037 5,661,457 1,973,885 1,933,073
Depreciation 2,971,446 2,519,915 1,022,674 890,934
Total operating
expenses 29,406,488 27,078,970 9,574,157 10,026,096
OPERATING INCOME 2,712,996 4,764,087 417,602 1,522,116
OTHER INCOME (EXPENSES):
Equity in income of
joint ventures 61,734 450,535 151,325 94,415
Interest expense - net (1,107,600) (1,000,437) (370,996) (329,055)
Other - net (393,638) 39,307 (145,197) 13,980
Total other (expenses) (1,439,504) (510,595) (364,868) (220,660)
INCOME BEFORE INCOME
TAXES 1,273,492 4,253,492 52,734 1,301,456
INCOME TAXES 579,804 1,451,380 49,557 422,383
NET INCOME $ 693,688 $ 2,802,112 $ 3,177 $ 879,073
NET INCOME PER COMMON
AND COMMON EQUIVALENT
SHARE $.19 $.78 $.00 $.24
AVERAGE COMMON AND
COMMON EQUIVALENT
SHARES OUTSTANDING 3,629,391 3,607,850 3,642,065 3,604,013
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
WEDCO TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1995 (UNAUDITED)
<CAPTION> Equity Adjustment
Common Stock Additional from Foreign
Number Paid-in Retained Currency
of Shares Amount Capital Earnings Translation
<S> <C> <C> <C> <C> <C>
Balance,
April 1, 1995 4,094,891 $409,489 $11,159,205 $16,740,328 $2,080,008
Net income 693,688
Adjustment resulting from foreign
currency translations (430,107)
Balance,
12/31/95 4,094,891 $409,489 $11,159,205 $17,434,016 $1,649,901
</TABLE>
<TABLE>
<CAPTION>
Treasury Stock
Number
of Shares Amount
<S> <C> <C>
Balance,
April 1, 1995 (527,106) $(3,278,360)
Net income
Adjustment resulting from foreign
currency translations
Balance,
12/31/95 (527,106) $(3,278,360)
<FN>
See notes to consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
WEDCO TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1995 AND 1994 (UNAUDITED)
<CAPTION>
Cash Flows From Operating Activities: 1995 1994
<S> <C> <C>
Net Income $693,688 $2,802,112
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 2,971,446 2,519,915
Gain on sale of fixed assets (48,983) (30,974)
Equity in income of joint ventures (61,734) (450,535)
Increase (decrease) in deferred income taxes (77,490) 50,001
Increase in deferred compensation 135,000
Decrease in accrual for environmental cleanup (50,490) (55,118)
Net change in operating assets and liabilities 999,316 (128,371)
Net cash provided by operating activities 4,560,753 4,707,030
Cash Flows From Investing Activities:
Proceeds from sale of fixed assets 13,822 134,295
Purchases of property, plant and equipment (5,731,427) (4,259,350)
Decrease in amounts receivable from related
parties 215,763 455,730
Repayment of capital by joint venture 242,720
Net cash used in investing activities (5,501,842) (3,426,605)
Cash Flows From Financing Activities:
Net borrowings (repayments) under credit
agreements 51,090 (1,257,202)
Treasury stock transactions 193,260
Net cash provided by (used in) financing
activities 51,090 (1,063,942)
Effect of foreign exchange rate changes on cash (2,144) 3,514
Net increase (decrease) in cash (892,143) 219,997
Cash at beginning of period 1,039,760 799,268
Cash at end of period $ 147,617 $1,019,265
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest $1,102,000 $ 977,000
Income taxes 834,000 1,627,000
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
WEDCO TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The financial statements as of December 31, 1995 and for the nine and three
months ended December 31, 1995 and 1994 are unaudited; however, the
March 31, 1995 balance sheet was derived from audited financial statements.
In the opinion of management, such financial statements include all
adjustments (consisting only of normal recurring items) necessary for a
fair presentation. The results of operations for the nine and three
months ended December 31, 1995 are not necessarily indicative of the
results to be expected for the entire year. Certain prior year amounts
have been reclassified to conform to the current presentation.
These financial statements, note disclosures and other information should
be read in conjunction with the financial statements and related notes
of the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1995, as filed with the Securities and Exchange Commission.
<PAGE>
<TABLE>
2. INVENTORIES
Inventories at December 31 and March 31, 1995 consist of the following:
<CAPTION>
December 31 March 31
<S> <C> <C>
Raw materials, parts and supplies $ 1,511,540 $ 1,696,840
Work in process 543,186 334,169
Total $ 2,054,726 $ 2,031,009
<FN>
</TABLE>
If all of the Company's inventories were costed on the first-in, first-out
method, inventories would have been approximately $624,000 higher at
December 31 and March 31, 1995.
<PAGE>
<TABLE>
3. INVESTMENT IN JOINT VENTURES
The following table summarizes the status and results of the Company's
investment in joint ventures for the nine months ended December 31, 1995.
<CAPTION>
Micronyl-
WedTech Inc. Wedco S.A. Total
<S> <C> <C> <C>
Balance, April 1, 1995 $2,890,164 $1,911,631 $4,801,795
Equity in income (loss) (105,330) 167,064 61,734
Adjustment due to foreign
currency translation (84,127) (84,127)
Balance, December 31, 1995 $2,784,834 $1,994,568 $ 4,779,402
</TABLE>
<PAGE>
4. COMMITMENTS AND CONTINGENCIES
In conjunction with the sale of real estate owned by a former subsidiary,
the New Jersey Department of Environmental Protection and Energy (D.E.P.E.)
issued an Administrative Consent Order (A.C.O.) to the Company, under the
Environmental Clean-up Responsibility Act (E.C.R.A.). According to
E.C.R.A., property title cannot pass to a new owner until the
D.E.P.E. is satisfied that the property meets defined environmental
standards or an A.C.O. has been issued.
Inspections have shown that the site contains contaminates which must be
removed. Accordingly, a cleanup plan was prepared and approved by the
D.E.P.E. The Company has provided accruals of $1,400,000 for the
total estimated costs related to cleanup activities, of which
approximately $1,129,163 has been paid as of December 31, 1995. Recent
sampling results indicate that the Company's groundwater remediation
program is working effectively to reduce the level of groundwater
contamination. It is difficult to estimate, with a high level of
confidence, the total costs which may be incurred in cleaning this site.
Expenses in excess of what the Company has recorded could be incurred due
to the inherent uncertainty surrounding the extent of contamination,
the complexity of governmental regulations and their interpretations
and the varying costs and effectiveness of cleanup technologies.
The Company believes, however, that its reserve is sufficient to
satisfy current D.E.P.E. requirements.
5. MERGER AGREEMENT
On December 8, 1995, the Company entered into a definitive merger
agreement with ICO, Inc. ("ICO") pursuant to which the Company would
merge with and into a wholly-owned subsidiary of ICO, Inc.
In the proposed merger, each of the Company's shareholders would receive,
at its option, 2.84 shares of ICO common stock or a combination of
2.2 shares of such stock and $3.50 in cash for each share of the
Company's common stock held. The proposed merger is subject to approval
of the Company's shareholders, approval by ICO's shareholders of the
issuance of shares of ICO common stock in the proposed Merger,
satisfaction of certain regulatory requirements and other conditions
customary in transactions of this nature. ICO, based in Houston,
Texas, serves the energy industry by testing, inspecting,
reconditioning and coating sucker rods and OCTG, basic tools utilized
in exploration and production for oil and natural gas. For its
most recent fiscal year, which ended September 30, 1995, ICO reported
net revenues of $88.9 million, income before federal taxes of
$6.4 million and net income of $5.8 million.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
During the nine-month period ended December 31, 1995, net revenues
were relatively unchanged when compared to the same period in 1994.
For the three months ended December 31, 1995, however, net revenues
declined by 13.5% when compared to the same quarter of the prior
fiscal year. Operating income decreased by 43.1% and 72.6% during
the nine and three-month periods ended December 31, 1995,
respectively, when compared to the same periods in 1994. The
cyclical downturn in the worldwide plastics industry experienced
during the current fiscal year resulted in declines in the
utilization of machinery and equipment and the absorption of certain
overhead costs in several of the Company's facilities.
Furthermore, a portion of the revenues reported during the
current nine-month period is attributed to an increase in
compounding services rendered by the Company's Dutch subsidiary.
Such compounding revenues yield lower margins than traditional
processing services. Income from the Company's equity in joint
ventures decreased by 86.3% during the current nine-month
period, despite a 60.3% increase in these earnings during the
current three-month period. Interest expense increased 10.7% and 12.7%
during the current nine and three-month periods, respectively, when
compared to the same periods of 1994. Other expenses also increased
by approximately $433,000 and $159,000 during the nine and three-month
periods ended December 31, 1995, respectively, as compared to the same
periods of the prior year, due to the Company incurring certain
expenses associated with the potential acquisition of the Company.
The decreases in operating income and joint venture earnings,
coupled with increases in other expenses, resulted in a 75.2% and
99.6% decline in net income for the nine and three-month periods
ended December 31, 1995, respectively, when compared to the same
periods of the prior fiscal year. There can be no assurance
that such decreases in operating income and joint venture
earnings and increase in expenses will not continue.
Net Revenues and Operating Income
The components of the changes in net revenues, as noted above,
were as follows:
<TABLE>
<CAPTION>
Nine Months Three Months
Components Ended December 31 Ended December 31
of Revenue Growth(Decline) 1995 vs. 1994 1995 vs. 1994
<S> <C> <C>
Processing Services:
Volume decrease $(4,010,000) $(2,407,000)
Change in average price
per pound (1) 2,309,000 568,000
Machinery sales 697,000 11,000
Foreign currency translation (2) 1,280,000 272,000
Total revenue growth (decline) $ 276,000 $ (1,556,000)
<FN>
(1) Based on average price per pound, which is affected by product mix
and volume processed during the period.
(2) Due to changes in the translation rates used to convert the revenues
of Wedco Europe B.V. into U.S. dollars.
</TABLE>
<PAGE>
During the nine months ended December 31, 1995, the Company processed
approximately 275 million pounds of material as compared to
approximately 317 million pounds in the same period of the prior fiscal
year. This decrease in volume is reflective of the downturn in the plastics
industry experienced during the current nine-month period when compared to
the same period in 1994, as well as an increase in competition in
the United States. On a consolidated basis, as a percentage of net revenues,
operating expenses, excluding general corporate expenses, were 84.9%
and 77.7% for the nine months ended December 31, 1995 and 1994,
respectively. These same percentages for the three-month periods
ended December 31, 1995 and 1994 were 86.4% and 80.5%, respectively.
Operating margins have declined in the current nine and three-month
periods as a result of the underutilization of machinery and equipment,
increased labor costs in certain domestic locations and the increase in
lower margin compounding revenues experienced in Europe.
As a percentage of net revenues, general corporate expenses, excluding
costs associated with the pending acquisition of the Company, were
6.7% and 7.3% for the nine months ended December 31, 1995 and 1994,
respectively. These same percentages for the three-month periods
ended December 31, 1995 and 1994 were 9.5% and 6.4%, respectively.
The increase in this percentage during the three-month period
ended December 31, 1995 as compared to the same period in 1994 reflects
the decline in revenues experienced during the current three-month
period.
Other Income (Expense)
Income from the Company's investment in joint ventures decreased by
86.3% and increased 60.3% during the current nine and three-month
periods, respectively, when compared to the same periods of the prior
year. Both of the Company's joint ventures reported a decline in
earnings during the current nine-month period. In France,
Micronyl-Wedco S.A.'s earnings have been affected by the current decline
in the plastics industry, resulting in a decrease in the volume of
materials processed during the current periods. In Canada,
WedTech Inc.'s earnings continue to be negatively impacted by ongoing
costs associated with its sales, marketing and administrative
office in Toronto, Canada and repetitive monthly losses associated
with its research and production facility in Dewey, Oklahoma.
Furthermore, the current market for grinding and compounding services
in Canada has become increasingly more competitive. As such, these
revenues are yielding lower margins than in prior periods. The impact
of all of the above, coupled with increased interest expense related
to financing these activities, was a 178.3% decline in WedTech Inc.'s
earnings during the current nine-month period. Under the equity method of
accounting, net revenues of the joint ventures are not included in the
consolidated net revenues of the Company.
As a result of the increase in the U.S. prime lending rate and
increased foreign borrowings related to capital expenditures, interest
expense increased by approximately $107,000 and $42,000 during the nine
and three-month periods ended December 31, 1995, as compared to the same
periods in 1994.
Other expenses increased by approximately $433,000 and $159,000 during the
nine and three-month periods ended December 31, 1995 when compared to the
same periods of the previous fiscal year. These net increases reflect
approximately $470,000 and $174,000 in legal, accounting and other expenses
incurred in each respective period by the Company, in connection with the
pending acquisition of the Company. (See Note 5 to the Consolidated
Financial Statements above.) It is anticipated that during the
Company's fourth quarter of fiscal 1996, additional costs will be incurred
and expensed in relation to this pending transaction.
<PAGE>
Income Taxes
As a result of the 70.1% and 96.0% decline in pre-tax income experienced
during the nine and three-month periods ended December 31, 1995,
respectively, as compared to the same periods in 1994, the Company's
consolidated income tax provision declined by 60.1% and 88.3% during
these same periods, respectively.
The Company's effective tax rate, expressed as a percentage of pre-tax
income, was 45.5% and 94.0% during the nine and three-month periods
ended December 31, 1995, respectively, as compared to 34.1% and 32.5%
during the same periods of the prior fiscal year, respectively. The
increase in the Company's effective tax rate during the current nine
and three-month periods reflects the utilization of tax-loss
carryforwards by the Company's U.K. subsidiary during the same periods
of the prior fiscal year, as well as the effect of federal and state
regulations which prohibit the Company from treating the costs
associated with the pending acquisition of the Company as deductible
expenses for income tax purposes.
Foreign Currency Translation
The fluctuation of the dollar against the Dutch guilder and the British
pound have impacted the translation of revenues and income of Wedco
Europe B.V. into U.S. dollars for the nine and three-month periods ended
December 31, 1995, as compared to the same periods of the prior
fiscal year. The increases due to this translation impact, in certain
amounts shown on the Consolidated Statements of Income, are as follows:
<TABLE>
<CAPTION>
Nine Months Three Months
Ended December 31 Ended December 31
1995 vs. 1994 1995 vs. 1994
<S> <C> <C>
Net revenues $ 1,280,000 $272,000
Operating income 188,000 4,000
Pre-tax income 172,000 1,000
Net income 134,000 6,000
</TABLE>
<PAGE>
Gains and losses from the translation of certain balance sheet accounts
are not included in determining net income, but are accumulated as a
separate component of stockholders' equity. These unrealized gains
and losses are subject to deferred income taxes. As a result of the
dollar's fluctuation against the Dutch guilder and British pound
and changes in the net assets of foreign subsidiaries, stockholders'
equity decreased, net of deferred income taxes, by approximately
$430,000 during the nine-month period ended December 31, 1995.
Financial Condition
Working capital decreased from March 31 to December 31, 1995 by
approximately $2.6 million. While several components of working
capital fluctuated during this nine-month period, the $2.6
million decrease is primarily the result of decreases in cash,
accounts receivable, accounts payable and federal, state and
foreign income taxes payable, offset by increases in short-term notes
payable, accrued expenses and other current liabilities. The
decrease in working capital resulted in a decline in the Company's
current ratio from 1.1:1 at March 31, 1995 to 0.84:1 at December
31, 1995. As of December 31, 1995, the Company's debt to net
equity ratio, including notes payable and current maturities of
long-term debt, decreased to 0.74:1 from 0.76:1 at March 31,
1995. This decrease in leverage is primarily the result of
earnings experienced during the current nine-month period.
Capital Expansion and Resources
During the first nine months of fiscal 1996, the Company
generated $4.6 million in cash from its operating activities,
a decrease of $0.1 million when compared to the same period of the prior
fiscal year. Substantially all of the cash generated in the current
nine-month period was invested in capital expenditures, as described
below. Net cash used in investing activities increased to $5,502,000
for the nine months ended December 31, 1995 from $3,427,000 in the
same period of the prior fiscal year. This fluctuation reflects a
$1,472,000 increase in capital expenditures, a $240,000 decrease in
amounts collected from related parties and a $243,000 repayment of
capital by the Company's Canadian joint venture resulting from the
redemption of 342,100 Class D special shares during the nine months
ended December 31, 1994. Cash flows from financing activities increased
by approximately $1.1 million during the nine-month period ended
December 31, 1995 as compared to the same period of the prior
fiscal year, primarily as a result of an increase in short-term
borrowings by the Company.
For the year ending March 31, 1996, management's objective is to foster
growth in earnings, through productivity improvements, increased capacity
utilization and continued emphasis on cost containment measures. With
that strategy in place, a capital budget of approximately $6.8 million
was approved for fiscal 1996. The Company anticipates that capital
expenditures for fiscal 1996 will be limited to maintaining or improving
the Company's existing facilities and installing new processing systems
in these facilities in order to meet specific market opportunities. The
Company anticipates financing its capital expenditures with cash provided
by operating activities and additional borrowings as needed. As of
December 31, 1995, the Company had a total of approximately $7.7 million
available under its domestic and foreign credit facilities.
<PAGE>
Contingencies
As discussed more fully in Note 4 to the Consolidated Financial
Statements, above, the Company anticipates paying for its environmental
cleanup with cash provided by operations. If the current provision
remains adequate, these costs should not have a material adverse
effect on the financial position, results of operations or cash flows of
the Company.
Effect of Inflation
The Company believes the relatively moderate rate of inflation currently
being experienced will not have a significant impact on the Company's
sales or profitability.
<PAGE>
PART II: OTHER INFORMATION
ITEM 1. Legal Proceedings:
No matters to report.
ITEM 2. Changes in Securities:
None.
ITEM 3. Defaults Upon Senior Securities:
None.
ITEM 4. Submission of Matters to a Vote of Security Holders:
None.
ITEM 5. Other Information:
As more fully described in Note 5 to the Consolidated
Financial Statements, above, the Company entered into a
definitive merger agreement with ICO, pursuant to which
the Company would merge with and into a wholly-owned
subsidiary of ICO. Consummation of the proposed merger
is subject to, among other things, approval of the
Company's shareholders. On February 9, 1996, the
Company filed with the Securities and Exchange
Commission a preliminary proxy statement relating
to the special meeting of the Company's shareholders
at which the proposed merger will be voted upon.
The Company's proxy statement was filed as part of
the Joint Proxy Statement/Prospectus included in
ICO's Registration Statement on Form S-4 (Reg.
No. 333-831).
ITEM 6. Exhibits and Reports on Form 8-K:
a. The following exhibits are filed as part of this
report:
Exhibit 2 Merger Agreement dated as of December 8, 1995,
by and among Wedco Technology, Inc.,
W Acquisition Corp. and ICO, Inc.
Exhibit 27 Financial Data Schedule for the
3rd quarter ended December 31, 1995
b. The Company did not file any reports on Form 8-K
during the quarter ended December 31, 1995.
<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 thereunto duly authorized.
WEDCO TECHNOLOGY, INC.
February 19, 1996 /s/William E. Willoughby
Date William E. Willoughby
President and Chairman of the Board
February 19, 1996 /s/Robert F. Bush
Date Robert F. Bush
Vice President-Finance
<PAGE>
Exhibit Index
Exhibit No. Description
2 Merger Agreement dated as of December 8, 1995,
by and among Wedco Technology, Inc.,
W Acquisition Corp. and ICO, Inc.
(appears as Annex A to the Joint
Proxy Statement/Prospectus initially filed as
part of ICO, Inc.'s Registration
Statement on Form S-4 (Reg. No. 333-831)
on February 9, 1996 and is incorporated
herein by reference).
27 Financial Data Schedule for the
3rd quarter ended December 31, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This Schedule contains Summary Financial
Information extracted from the Balance
Sheet and Statement of Income and is
qualified in its entirety by reference
to such financial statements.
<S> <C>
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> OCT-01-1995
<PERIOD-END> DEC-31-1995
<PERIOD-TYPE> 3-MOS
<CASH> 147,617
<SECURITIES> 0
<RECEIVABLES> 6,069,631
<ALLOWANCES> 52,515
<INVENTORY> 2,054,726
<CURRENT-ASSETS> 9,891,266
<PP&E> 39,027,797
<DEPRECIATION> 28,767,474
<TOTAL-ASSETS> 56,818,205
<CURRENT-LIABILITIES> 11,718,488
<BONDS> 14,871,959
0
0
<COMMON> 409,489
<OTHER-SE> 26,964,762
<TOTAL-LIABILITY-AND-EQUITY> 56,818,205
<SALES> 9,991,759
<TOTAL-REVENUES> 9,991,759
<CGS> 6,577,598
<TOTAL-COSTS> 9,574,157
<OTHER-EXPENSES> (6,128)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 370,996
<INCOME-PRETAX> 52,734
<INCOME-TAX> 49,557
<INCOME-CONTINUING> 3,177
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,177
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
