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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q/A
QUARTERLY REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
For the quarter ended June 30, 1998 Commission file number 1-11013
SPECIALTY CHEMICAL RESOURCES, INC.
Exact name of registrant as specified in its charter
Delaware 34-1366838
State of incorporation I.R.S. Employer I.D. No.
9055 S. Freeway Drive; Macedonia, Ohio 44056
Address of principal executive offices and zip code
(330)468-1380
Registrant's telephone number, including area code
Indicate by a 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 twelve (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 ninety(90) days. Yes__X__ No_____.
The number of outstanding shares of the Registrant's common stock as of
July 27, 1998 was 3,882,260.
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Specialty Chemical Resources, Inc.
Form 10-Q/A
For the quarter ended June 30, 1998
Index
Part I Financial Information Page
Item 1. Financial Statements......................................3
Condensed Balance Sheets..................................3
Condensed Statements of Operations, 3 months..............5
Condensed Statements of Operations, 6 months..............6
Condensed Statements of Cash Flows, 3 months..............7
Condensed Statements of Cash Flows, 6 months..............8
Notes to Financial Statements.............................9
Page 2 of 10
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Specialty Chemical Resources, Inc.
Condensed Balance Sheets
June 30, 1998 December 31, 1997
(Unaudited) (Audited)
----------- ---------
Current assets
Cash and cash equivalents $ 3,100 $ 3,100
Accounts receivables 5,238,247 5,338,168
Receivable - Other 770,727 343,657
Inventories - LIFO 7,941,711 8,944,905
Prepaid expenses 527,254 360,196
----------- -----------
Total current assets 14,481,039 14,990,026
Property, plant and equipment
At cost 18,207,565 17,740,267
Less accumulated depreciation
and amortization (6,157,952) (5,536,789)
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12,049,613 12,203,478
Other assets
Goodwill 880,279 894,319
Product formulation 550,766 692,894
Deferred financing costs 414,214 435,117
Other 295,104 302,044
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2,140,363 2,324,374
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Total assets $28,671,015 $29,517,878
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See accompanying Notes to Financial Statements.
Page 3 of 10
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Specialty Chemical Resources, Inc.
Condensed Balance Sheets
(continued)
June 30, 1998 December 31, 1997
(Unaudited) (Audited)
----------- ---------
Current liabilities
Current maturities $ 907,464 $ 1,057,497
Accounts payable 4,803,493 6,893,119
Accrued expenses 487,400 624,759
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Total current liabilities 6,198,357 8,575,375
Long-term obligations 17,543,170 15,445,820
Stockholders' equity
Preferred stock - $.01 par value;
authorized 1,996,500 shares
Common stock - $.10 par value;
authorized 13,000,000 shares;
issued and outstanding 3,947,760
and 3,947,760 394,777 394,777
Additional paid in capital 41,935,125 41,935,125
Less common stock in treasury,
At cost; 65,500 shares (118,722) (118,722)
Accumulated deficit (37,281,692) (36,714,497)
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4,929,488 5,496,683
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$ 28,671,015 $ 29,517,878
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See accompanying Notes to Financial Statements.
Page 4 of 10
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Specialty Chemical Resources, Inc.
Condensed Statements of Operations
(Unaudited)
For the 3 month periods ended:
June 30, 1998 June 30, 1997
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Net sales $9,314,165 $9,355,703
Cost of goods sold 7,295,234 7,532,557
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Gross profit 2,018,931 1,823,146
Selling, general and administrative
expenses 1,599,701 1,414,414
Amortization of intangibles 106,584 256,361
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Operating profit (loss) 312,646 152,371
Other (income) expense
Interest expense 407,056 341,109
Other -0- (27,771)
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407,056 313,338
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Earnings (loss) before income
taxes (94,410) (160,967)
Income taxes -0- -0-
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Earnings (loss) (94,410) (160,967)
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Earnings (loss) per common share: $ (.02) $ (.04)
Weighted average shares outstanding 3,882,261 3,882,210
See accompanying Notes to Financial Statements.
Page 5 of 10
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Specialty Chemical Resources, Inc.
Condensed Statements of Operations
(Unaudited)
For the 6 month periods ended:
June 30, 1998 June 30, 1997
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Net sales $19,386,151 $19,552,782
Cost of goods sold 15,640,265 15,701,339
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Gross profit 3,745,886 3,851,443
Selling, general and administrative
expenses 3,298,443 2,991,539
Amortization of intangibles 213,134 515,322
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Operating profit 234,309 344,582
Other (income) expense
Interest expense 801,504 599,177
Other -0- (49,577)
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801,504 549,600
Earnings (loss) before income
taxes (567,195) (205,018)
Income taxes (benefit) -0- -0-
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Earnings (loss) (567,195) (205,018)
Earnings (loss) per common share: $ (.15) $ (.05)
Weighted average shares outstanding 3,882,261 3,882,156
See accompanying Notes to Financial Statements.
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Specialty Chemical Resources, Inc.
Condensed Statements of Cash Flows
(Unaudited)
For the 3 month periods ended:
June 30, 1998 June 30, 1997
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Net cash provided (used) by operating
activities $ (606,366) $ 1,695,068
Cash flows from investing activities:
Capital expenditures, other (159,545) (409,523)
Purchase of assets from Hysan Corp. -0- (6,785,000)
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Net cash (used) by investing
activities (159,545) (7,194,523)
Cash flows from financing activities:
Proceeds from notes 1,500,000 -0-
Payments on revolver (8,264,884) (15,098,316)
Proceeds on revolver 7,530,795 20,505,966
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Net cash provided (used) by
financing activities 765,911 5,407,650
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Net increase (decrease) in cash
and cash equivalents -0- (91,805)
Cash and cash equivalents at beginning
of period 3,100 134,414
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Cash and cash equivalents at end
of period $ 3,100 $ 42,609
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See accompanying Notes to Financial Statements.
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Specialty Chemical Resources, Inc.
Condensed Statements of Cash Flows
(Unaudited)
For the 6 month periods ended:
June 30, 1998 June 30, 1997
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Net cash provided (used) by operating
activities $ (1,330,473) $ 2,453,180
Cash flows from investing activities:
Capital expenditures, other (486,448) (575,797)
Purchase of assets from Hysan Corp. -0- (6,785,000)
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Net cash (used) by investing
activities (486,448) (7,360,797)
Cash flows from financing activities:
Proceeds from notes 1,500,000 -0-
Payments on revolver (21,771,929) (22,689,500)
Proceeds on revolver 22,088,850 27,471,085
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Net cash provided (used) by
financing activities 1,816,921 4,781,585
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Net increase (decrease) in cash
and cash equivalents -0- (126,032)
Cash and cash equivalents at beginning
of period 3,100 168,641
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Cash and cash equivalents at end
of period $ 3,100 $ 42,609
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See accompanying Notes to Financial Statements.
Page 8 of 10
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Specialty Chemical Resources, Inc.
Notes to Financial Statements
Note A - Summary of Significant Accounting Policies
The accompanying audited and unaudited financial statements have been
prepared in conformity with generally accepted accounting principles and all
adjustments are of a normal recurring nature and are, in the opinion of
management, necessary to present fairly the financial position of Specialty
Chemical Resources, Inc. (the "Company") at December 31, 1997 and June 30, 1998
and the results of operations and cash flows for the interim periods ended June
30, 1998 and 1997.
Any significant accounting policies employed in the preparation of the
financial statements are included in the Company's most recent Form 10-K.
Note B - Inventories
Inventories are stated at the lower of cost or market determined by the
last-in, first-out (LIFO) method for raw materials and the first-in, first-out
(FIFO) method for finished goods.
The Company's inventories consisted of the following at:
June 30, December 31,
1998 1997
---------- ----------
Raw materials $4,689,554 $5,416,048
Finished goods 3,947,714 4,224,414
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Total FIFO cost 8,637,268 9,640,462
Less: Excess of FIFO cost over
LIFO 695,557 695,557
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Total LIFO cost $7,941,711 $8,944,905
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Note C - Legal Proceedings
There have been no material changes in the status of legal proceedings
pending against the Company other than that which was reported on the Company's
most recent Form 10-K.
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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.
Specialty Chemical Resources, Inc.
By:/s/ DAVID F. SPINK January 18, 1999
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David F. Spink
Vice President, Chief Financial
Officer
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