<PAGE> 1
Sequential Page 1 of 9 Pages
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1994 Commission File number 0-663
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OGLEBAY NORTON COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 34-0158970
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1100 Superior Avenue Cleveland, Ohio 44114-2598
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 216 861-3300
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None
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Former name, former address and former fiscal year,
if changed since last report
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Shares of Common Stock outstanding at April 30, 1994: 2,491,326
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Index on sequential page 2.
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<TABLE>
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
INDEX
<CAPTION>
Sequential
Page Number
-----------
<S> <C>
Part I. Financial Information
------------------------------
Consolidated Condensed Balance
Sheet (Unaudited) - March 31, 1994 and
December 31, 1993 3
Consolidated Condensed Statement of
Operations (Unaudited) - Three Months
Ended March 31, 1994 and 1993 4
Consolidated Condensed Statement of
Cash Flows (Unaudited) - Three Months
Ended March 31, 1994 and 1993 5
Notes to Consolidated Condensed Financial
Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7 - 8
Part II. Other Information 9
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</TABLE>
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<TABLE>
Part I. FINANCIAL INFORMATION
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)
<CAPTION>
ASSETS
------
March 31 December 31
1994 1993
------------ ------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 12,165,567 $ 21,243,064
Investments 6,482,400 -0-
Accounts receivable less
allowances (1994-$2,047,000;
1993-$2,082,000) 20,781,590 28,291,306
Inventories
Raw materials and finished products 4,350,581 4,354,120
Operating supplies 2,299,018 2,305,719
------------ ------------
6,649,599 6,659,839
Deferred income taxes 2,591,985 3,801,985
Prepaid insurance and other expenses 7,089,352 2,191,166
------------ ------------
TOTAL CURRENT ASSETS 55,760,493 62,187,360
INVESTMENTS AND LONG-TERM RECEIVABLES 11,483,262 14,871,623
PROPERTIES AND EQUIPMENT 319,454,306 319,392,610
Less allowances for depreciation
and amortization 156,681,163 156,962,679
------------ ------------
162,773,143 162,429,931
PREPAID PENSION COSTS AND OTHER ASSETS 19,889,350 20,228,456
------------ ------------
$249,906,248 $259,717,370
============ ============
</TABLE>
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<TABLE>
Part I. FINANCIAL INFORMATION
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
March 31 December 31
1994 1993
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES
Current portion of long-term debt $ 11,083,057 $ 11,189,664
Accounts payable 3,905,145 4,021,985
Payrolls and other accrued compensation 2,258,479 4,828,016
Accrued taxes and other expenses 14,075,424 12,772,672
Income taxes (1,088,393) 733,414
Reserve for capacity rationalization 6,312,600 6,312,600
------------ ------------
TOTAL CURRENT LIABILITIES 36,546,312 39,858,351
LONG-TERM DEBT, less current portion 63,974,913 69,344,025
POSTRETIREMENT BENEFITS OBLIGATION 30,671,316 30,285,278
OTHER LONG-TERM LIABILITIES 27,837,600 30,958,323
DEFERRED INCOME TAXES 19,353,153 19,398,153
STOCKHOLDERS' EQUITY
Preferred stock, without par value,
authorized 5,000,000 shares;
none issued -0- -0-
Common stock, par value $1 per share,
authorized 10,000,000 shares;
issued 3,626,666 shares 3,626,666 3,626,666
Additional capital 8,988,043 8,988,043
Unrealized gains 2,348,564 -0-
Retained earnings 88,132,852 88,773,915
------------ ------------
103,096,125 101,388,624
Treasury stock, at cost - 1,135,240
and 1,122,740 shares at respective dates (28,965,201) (28,681,694)
Unallocated Employee Stock Ownership
Plan shares ( 2,607,970) ( 2,833,690)
------------ ------------
71,522,954 69,873,240
------------ ------------
$249,906,248 $259,717,370
============ ============
<FN>
See notes to consolidated condensed financial statements.
</TABLE>
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<TABLE>
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31
-------------------------------------
1994 1993
---- ----
<S> <C> <C>
REVENUES
Net sales $ 29,138,967 $ 15,090,982
Operating revenues 1,278,255 1,414,081
Sales commissions, royalties
and management fees 952,353 710,607
Gain on sale of assets 402,190 29,635
Interest, dividends and other income 270,559 334,771
------------ ------------
32,042,324 17,580,076
COSTS AND EXPENSES
Cost of goods sold 25,034,730 13,318,944
Operating expenses 1,134,976 1,304,866
General, administrative and
selling expenses 4,211,175 3,865,088
Reserve for doubtful accounts 58,094 46,338
Other expense 381,145 246,881
Interest expense 1,415,982 1,790,198
------------ ------------
32,236,102 20,572,315
Income (loss) before income taxes (193,778) (2,992,239)
Income taxes (benefit) ( 51,000) ( 904,000)
------------ ------------
NET INCOME (LOSS) $ (142,778) $ (2,088,239)
============ ============
NET INCOME (LOSS) PER SHARE OF COMMON STOCK $ (.06) $ (.83)
============ ============
DIVIDENDS PER SHARE OF COMMON STOCK $ .20 $ .20
============ ============
Average number of shares of Common Stock
outstanding 2,493,398 2,512,926
<FN>
See notes to consolidated condensed financial statements.
</TABLE>
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<TABLE>
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31
-------------------------------------
1994 1993
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ ( 142,778) $ ( 2,088,239)
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Depreciation and amortization 1,460,491 1,238,455
Deferred income taxes ( 45,000) 127,710
Gain on sale of assets ( 402,190) ( 29,635)
Prepaid pension costs and other assets 161,258 ( 166,851)
Deferred vessel maintenance costs (4,245,270) ( 5,235,864)
Decrease (increase) in accounts receivable 7,718,808 5,684,039
Decrease (increase) in inventories 10,240 ( 170,763)
Increase (decrease) in accounts payable ( 116,840) 45,708
Increase (decrease) in income taxes (1,821,807) ( 1,062,148)
Increase (decrease) in accrued taxes and other accruals (1,157,675) ( 1,714,706)
Other operating activities (1,661,315) ( 6,174,052)
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NET CASH USED IN OPERATING ACTIVITIES ( 242,078) ( 9,546,346)
INVESTING ACTIVITIES
Proceeds from sale of assets 652,748 29,833
Purchase of properties and equipment (1,295,690) ( 542,650)
Investments in Iron Ore (1,434,966) ( 1,417,710)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (2,077,908) ( 1,930,527)
FINANCING ACTIVITIES
Payments on long-term debt (5,975,720) ( 975,720)
Dividends paid ( 498,285) ( 502,585)
Purchase of treasury stock ( 283,506) -0-
------------ ------------
NET CASH USED IN FINANCING ACTIVITIES (6,757,511) ( 1,478,305)
------------ ------------
Decrease in cash and cash equivalents (9,077,497) (12,955,178)
CASH AND CASH EQUIVALENTS, JANUARY 1 21,243,064 23,332,342
------------ ------------
CASH AND CASH EQUIVALENTS, MARCH 31 $ 12,165,567 $ 10,377,164
============ ============
<FN>
See notes to consolidated condensed financial statements.
</TABLE>
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<PAGE> 7
OGLEBAY NORTON COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The accompanying unaudited consolidated condensed financial statements
have been prepared in accordance with the instructions to Form 10-Q
and, therefore, do not include all information and notes to the
consolidated financial statements necessary for a fair presentation of
financial position, results of operations and cash flows in conformity
with generally accepted accounting principles. Management of the
Registrant, however, believes that all adjustments considered
necessary for a fair presentation of the results of operations for
such period have been made. Certain amounts in the prior year have
been reclassified to conform with the 1994 consolidated condensed
financial statement presentation. For further information, refer to
the consolidated financial statements and notes thereto included in
the Registrant's 1993 annual report on Form 10-K.
2. Operating results are not necessarily indicative of the results to be
expected for the year, due to the seasonal nature of certain aspects
of the Registrant's business.
3. The Registrant's wholly owned subsidiary Saginaw Mining Company,
ceased operation of its St. Clairsville, Ohio coal mine on August 28,
1992, and began the mine closing process. Permanent closure of the
mine was completed in 1993. Closure costs of this discontinued
operation are being fully funded by a public utility customer, as
required by contract. Final settlement and funding of the
closure costs has been extended to July 31, 1994, at the request of
the customer. Remaining liabilities related to the discontinued
operation are included in the accounts of the Registrant on the
consolidated condensed balance sheet.
4. In 1993, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities". The Registrant adopted
the provisions of the new standard, effective January 1, 1994, and
increased stockholders' equity by $2,971,792 (net of $1,531,000 in
income taxes) to reflect unrealized holding gains on investments
reported as available-for-sale. Unrealized holding gains of
$2,348,564 (net of $1,210,000 in income taxes) are included in
stockholders' equity at March 31, 1994. In accordance with the
Statement, prior year financial statements have not been restated for
the accounting change.
5. Available-for-sale investments are carried at fair value, based on
quoted market prices, and are reported as a current asset in the
consolidated condensed balance sheet. Realized gains and losses on
the sale of such investments are based on average cost. In 1993, the
Registrant reported these investments at the lower of cost or market
and as long-term.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Due to the seasonal nature of certain aspects of the
Registrant's business, the operating results and cash flows for the first three
months of the year are not necessarily indicative of the results to be expected
for the full year.
FINANCIAL CONDITION
-------------------
At March 31, 1994 the Registrant's net current assets were
$19,215,000 as compared to $22,329,000 at December 31, 1993. Net current assets
declined from the end of last year primarily as a result of the purchase of
properties and equipment, the reduction of long-term debt and other
liabilities, the payment of dividends, the purchase of Treasury Stock, and the
payment of the Registrant's portion of Eveleth Mines debt. This decline was
partially offset by the reclassification of available-for-sale investments to
current assets.
During the first quarter of 1994, the Registrant purchased
12,500 shares of its Common Stock on the open market and placed these shares in
treasury. The Registrant declared and paid dividends of $.20 per share in the
first quarter of 1994 and 1993.
Cash flow from operations in the first quarter of 1994
improved from the first quarter of 1993 and was very close to breakeven. This
represents strong cash flow performance for the Registrant in a period of
traditionally slow seasonal business activity. As a result of its improved
cash position, the Registrant repaid a total of $5,000,000 of its revolving
credit long-term borrowings in January and February of 1994. Anticipated cash
flows from operations and current financial resources are expected to meet the
Registrant's needs during the remainder of 1994.
RESULTS OF OPERATIONS
---------------------
THREE MONTHS ENDED MARCH 31, 1994 COMPARED TO
THREE MONTHS ENDED MARCH 31, 1993
The Registrant's 1994 first quarter consolidated net loss was
$143,000 or $.06 per share on consolidated revenues of $32,042,000 compared to
a net loss of $2,088,000 or $.83 per share on revenues of $17,581,000 for the
same quarter in 1993. Consolidated net sales, operating revenues, sales
commissions, royalties and management fees amounted to $31,370,000 in the first
quarter of 1994, an 82% improvement over the 1993 first quarter level of
$17,216,000. The Company's first quarter results reflect the seasonal nature
of a substantial portion of its business and are not indicative of the results
anticipated for the full year.
In 1993, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities". As further described in Notes 4
and 5 to the consolidated condensed financial statements, the Registrant
adopted the provisions of the new standard, effective January 1, 1994.
Included in first quarter 1994 revenues is $339,000 of gains on the sale of
available-for-sale investments.
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<PAGE> 9
RESULTS OF OPERATIONS (Continued)
THREE MONTHS ENDED MARCH 31, 1994 COMPARED TO
THREE MONTHS ENDED MARCH 31, 1993
Interest expense declined 21% in the first quarter of 1994,
compared to the same quarter in the prior year, due to the refinancing of a
portion of the Registrant's long-term debt in December 1993 and an overall
reduction in debt.
Operating results of the Registrant's business segments for
the first quarter ended March 31, 1994 and 1993 are discussed below. It is the
policy of the Registrant to allocate certain corporate general and
administrative expenses to its business segments.
Operating revenues for the Registrant's Marine Transportation
segment amounted to $478,000 for the first quarter of 1994 compared to $489,000
for the first quarter of 1993. The segment's operating loss of $727,000 for
the first quarter of 1994 declined 8% compared to $794,000 for the first
quarter of 1993. The improvement is primarily a result of shuttle service
provided to a customer to transport iron ore within the Cuyahoga River during
January and February. Due to severe ice conditions on the Great Lakes, the
start of the Registrant's shipping season was delayed until April 1994. In
1993, the fleet began the shipping season with three vessels in March.
Presently, eleven of the Registrant's vessels are in operation with a planned
twelfth vessel to sail at the end of the second quarter.
Net sales, royalties and management fees for the Registrant's
Iron Ore segment increased to $14,070,000 for the first quarter of 1994
compared to $1,661,000 for the first quarter of 1993 as a result of additional
tonnage requirements by consumers. The segment's 1994 first quarter operating
profit of $2,191,000 compared to a profit of $53,000 for the first quarter of
1993. The improvement was attributable to new sales, coupled with cost
containment efforts at the Registrant's Eveleth Mines iron ore operations.
Net sales for the Registrant's Industrial Sands segment
amounted to $6,236,000 for the first quarter of 1994, a 6% increase over 1993
first quarter sales of $5,866,000. The segment's 1994 first quarter operating
profit of $273,000 was comparable to a $239,000 profit for the first quarter of
1993.
Net sales for the Registrant's Refractories and Minerals
segment, previously identified as the Manufacturing segment, amounted to
$9,624,000 for the first quarter of 1994, which was a 20% improvement compared
to $7,999,000 for the same period in 1993. Operating profit for the segment
was $524,000 for the first quarter of 1994 which was a 24% improvement compared
to $422,000 for the same period in 1993. Concentrated efforts to improve sales
through product line diversification and technical assistance accounted for the
increases in 1994.
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PART II. OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K
- - ------ --------------------------------
(a) Exhibits - None
(b) Reports on Form 8-K - None
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.
OGLEBAY NORTON COMPANY
DATE: May 16, 1994 By:
------------------------------
R. J. Kessler
Vice President -
Finance and Development
On behalf of the Registrant
and as Principal Financial
and Accounting Officer
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