<PAGE> 2
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the period ended April 3, 1994
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 0-13787
INTERMET CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-1563873
--------------------------- ------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
Suite 1600, 2859 Paces Ferry Road, Atlanta, Georgia 30339
---------------------------------------------------------
(Address of principal executive offices and zip code)
(404) 431-6000
----------------------------------------------------
(Registrant's telephone number, including area code)
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
Shares outstanding of each of the issuer's classes of
common stock at May 16, 1994: 24,580,719 shares of
Common Stock, $0.10 par value per share.<PAGE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
INTERMET CORPORATION
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
<CAPTION>
Dec 31 April 3
1993 1994
------ -------
ASSETS
------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 11,240 $ 3,270
Accounts receivable:
Trade, less allowance for
doubtful accounts of $518
in 1993 and 1994 47,440 56,466
Other 5,502 3,150
-------- --------
52,942 59,616
Inventories 37,232 33,521
Income taxes 5,629 3,735
Prepaid expenses 1,586 1,396
-------- ------
Total current assets 108,629 101,538
Property, plant and equipment,
at cost 328,665 336,333
Less:
Foreign industrial development
grants, net of amortization 5,275 5,268
Accumulated depreciation and
amortization 150,093 157,397
-------- -------
Net property, plant
and equipment 173,297 173,668
Other assets 19,634 19,428
Deferred income taxes 5,898 5,898
-------- -------
$307,458 $300,532
======== ========
See accompanying notes.
/TABLE
<PAGE>
<PAGE> 4
INTERMET CORPORATION
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
<TABLE>
<CAPTION>
Dec 31 April 3
1993 1994
------ -------
LIABILITIES AND SHAREHOLDERS' EQUITY
- - ------------------------------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 34,784 $ 30,313
Accrued liabilities 29,482 31,830
Debt due within one year 4,732 4,811
-------- --------
Total current liabilities 68,998 66,954
Noncurrent liabilities:
Debt due after one year 101,861 93,891
Retirement benefits 45,624 46,174
Deferred income taxes 4,482 4,815
Other noncurrent liabilities 8,124 8,124
-------- -------
Total noncurrent liabilities 160,091 153,004
Minority interests 2,837 2,837
Shareholders' equity:
Common stock 2,457 2,458
Capital in excess of par value 51,742 51,789
Retained earnings 22,715 24,425
Accumulated translation adjustments 1,499 1,946
Minimum pension liability adjustment (2,881) (2,881)
-------- -------
Total shareholders' equity 75,532 77,737
-------- -------
$307,458 $300,532
======== ========
See accompanying notes.
</TABLE>
<PAGE>
<PAGE> 5
<TABLE>
INTERMET CORPORATION
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands of dollars, except per share data)
<CAPTION>
Three months ended
------------------
April 4 April 3
1993 1994
------- -------
<S> <C> <C>
Net sales $122,763 $118,889
Cost of sales 110,056 105,302
-------- --------
Gross profit 12,707 13,587
Operating expenses:
Selling 1,691 1,416
General and administrative 7,393 7,069
------ ------
9,084 8,485
------ ------
Operating profit 3,623 5,102
Other income and expenses:
Interest income 32 67
Interest expense (1,484) (1,397)
Other, net 3 92
------ ------
(1,449) (1,238)
------ ------
Income before income taxes and
minority interest 2,174 3,864
Provision for income taxes 1,467 2,154
------ ------
Income before minority interest 707 1,710
Minority interest 13 -
------ -------
Net income $ 720 $ 1,710
======== ========
Earnings per share $ 0.03 $ 0.07
======== ========
See accompanying notes.
</TABLE>
<PAGE>
<PAGE> 6
<TABLE>
INTERMET CORPORATION
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands of dollars)
<CAPTION>
Three months ended
------------------
April 4 April 3
1993 1994
------- ------
<S> <C> <C>
Operating activities:
Net income $ 720 $ 1,710
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 6,578 6,623
Other 63 75
Changes in assets and liabilities:
Accounts receivable (18,562) (6,344)
Inventories 1,470 3,876
Accounts payable and accrued
liabilities 12,286 ( 331)
Other assets and liabilities 432 2,492
--------- -------
Net cash provided by operating activities: 2,987 8,101
--------- -------
Investing activities:
Additions to property, plant and equipment (10,834) ( 7,232)
Other ( 38) ( 294)
-------- -------
Net cash used in investing activities (10,872) ( 7,526)
------- -------
Financing activities:
Increase in long-term debt 5,375 -
Reduction in long-term debt ( 1,430) ( 8,569)
Dividends paid ( 981) -
Issuance of common stock 273 48
Other ( 64) -
------- -------
Net cash provided by (used in) financing
activities 3,173 ( 8,521)
------- -------
Effect of exchange rate changes on cash
and cash equivalents 20 ( 24)
------- -------
Net decrease in cash and cash equivalents ( 4,692) ( 7,970)
Cash and cash equivalents at beginning of
period 6,097 11,240
------- -------
Cash and cash equivalents at end of period $ 1,405 $ 3,270
======== =======
See accompanying notes.
</TABLE>
<PAGE>
<PAGE> 7
INTERMET CORPORATION
NOTES TO INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
1. The condensed consolidated balance sheet at December 31,
1993 has been derived from audited consolidated financial statements.
The interim condensed consolidated financial statements at April 3,
1994 and for the periods ended April 4, 1993 and April 3, 1994 are
unaudited; however, in the opinion of management, all adjustments,
consisting only of normal recurring accruals, necessary for a fair
presentation have been included. The results of operations for the
interim period ended April 3, 1994 are not necessarily indicative of
the results to be expected for the full year.
2. Inventories consist of the following (in thousands of
dollars):
<TABLE>
<CAPTION>
Dec 31 April 3
1993 1994
------ -------
<S> <C> <C>
Finished goods $ 6,316 $ 4,458
Work in process 7,154 4,651
Raw materials 5,345 4,730
Supplies and patterns 18,417 19,682
-------- -------
$ 37,232 $33,521
======== =======
</TABLE>
3. Property, plant and equipment consist of the following
(in thousands of dollars):
<TABLE>
<CAPTION>
Dec 31 April 3
1993 1994
------ -------
<S> <C> <C>
Land $ 3,520 $ 3,525
Buildings and improvements 62,669 63,203
Machinery and equipment 218,733 222,625
Construction in progress 43,743 46,980
--------- ---------
$ 328,665 $ 336,333
========= =========
</TABLE>
4. Long-term debt consists of the following (in
thousands of dollars):
<TABLE>
<CAPTION>
Dec 31 April 3
1993 1994
----- -------
<S> <C> <C>
Intermet $ 88,094 $ 80,900
Subsidiaries 18,499 17,802
--------- --------
Total long-term debt 106,593 98,702
Less amounts due within one year 4,732 4,811
--------- --------
$ 101,861 $ 93,891
========= ========
</TABLE>
<PAGE>
<PAGE> 8
5. The provision for income taxes differs from the amount
computed by applying the statutory U.S. federal income tax rate to
income before income taxes for the following reasons (in thousands
of dollars):
<TABLE>
<CAPTION>
Three months ended
--------------------
April 4 April 3
1993 1994
------- -------
<S> <C> <C>
Provision for income taxes at
U.S. statutory rate $ 739 $ 1,352
Charges with no tax effect 237 292
Difference between U.S. and
foreign tax rates 177 189
State income taxes net of
federal benefit 274 286
Other 40 35
--------- --------
$ 1,467 $ 2,154
========= ========
</TABLE>
<PAGE>
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MATERIAL CHANGES IN FINANCIAL CONDITION
The Company's financial position has changed little since
the beginning of the year. Cash balances were unusually high at
year-end due to the timing of cash receipts and have now returned
to more normal levels. Funded debt fell almost $8 million in the
first quarter as well. The decrease in funded debt was largely
the result of cash balances being applied against revolving debt.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Net sales for the first quarter fell $3.9 million (3.2%)
from the first quarter of 1993. The sales decline was due to the
loss of revenue from operating units closed or sold since the
first quarter of last year. Sales at plants operating in both
periods actually rose almost $10 million, approximately half of
which was related to business transferred from the plants closed
or sold. The sales growth was primarily the result of an
increase in tons shipped, although price increases on certain
products also contributed to the rise. Sales for the balance of
the year are expected to exceed prior year amounts despite the
loss of revenue from units closed or sold in 1993.
Gross profit rose slightly in the first quarter of 1994
compared to 1993. Gross profit also went up as a percent of
sales, increasing from 10.4% to 11.4%. Operating results at the
Ironton, Ohio foundry have improved significantly over the first
quarter of 1993. However, the performance of the New River
foundry in Virginia has suffered as it nears the scheduled second
quarter startup of its new production line. In addition, the
Company has not yet realized the full benefit of the decision to
close the Lower Basin foundry and the other changes which
resulted from that decision. Consolidated gross profit is
expected to continue improving as the year progresses.
Operating expenses dropped to $8.5 million in the first
quarter of 1994 from $9.1 million in 1993. Operating expenses
for the full year are expected to be approximately the same as in
1993.
Interest expense for the first quarter fell slightly from
the first quarter of 1993. The effect of higher borrowing levels
was more than offset by capitalized interest of over $400,000
related to the expansion of the New River foundry.
The Company's effective income tax rate varied for the
reasons set forth in Note 5 to the interim condensed consolidated
financial statements.<PAGE>
<PAGE> 10
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
In August 1991 Lynchburg Foundry Company
("Lynchburg"), a wholly-owned subsidiary of the
Registrant, was served with a complaint (the
"Complaint") by the United States Environmental
Protection Agency (the "EPA"). The Complaint
alleges certain violations by Lynchburg of the
Resource Conservation and Recovery Act, the most
significant of which relate to the treatment of
certain hazardous waste at two of Lynchburg's
foundries. The EPA initially proposed a civil
penalty in the amount of $1,514,000 which Lynchburg
appealed. Lynchburg and the EPA have reached an
agreement in principle calling for a penalty of
$330,000.
The Company has entered into negotiations with the
Office of the Ohio Attorney General with respect
to certain past violations by the Registrant's
Ironton, Ohio foundry of Ohio water pollution laws and
regulations. In a letter received in March 1994, the
Attorney General's office advised the Registrant that
the Company could avoid litigation with respect to
such violations by entering into a consent order. The
Company responded to the Attorney General's letter in
April and expects to enter into a consent order
providing for monetary penalties. Management does not
expect this matter to have a material adverse effect on
the Company's operations or financial position.
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
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following Exhibit is filed as a part of
this report:
<TABLE>
<CAPTION>
Exhibit
Number Description
------- ----------------------------------------
<C> <S>
11.1 Computation of Earnings per Common Share
</TABLE>
<PAGE>
<PAGE> 11
SIGNATURE
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.
INTERMET CORPORATION
By: /s/ Peter C. Bouxsein
----------------------
Peter C. Bouxsein
Controller
(Principal Accounting Officer)
DATE: May 17, 1994
<PAGE>
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- - ------- ----------------------------------
<C> <S>
11.1 Computation of Earnings per Common
Shares
</TABLE>
EXHIBIT 11.1
<TABLE>
INTERMET CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE
(In thousands, except per share data)
<CAPTION>
Three months ended
-----------------------
April 4 April 3
1993 1994
------- -------
<S> <C> <C>
Net income $ 720 $ 1,710
======== =======
Weighted average number of
shares outstanding 24,545 24,577
Dilutive effect of
outstanding options 178 127
------- ------
Weighted average number of
shares and equivalent
shares outstanding 24,723 24,704
-------- ------
Earnings per share $ 0.03 $ 0.07
======== =======
</TABLE>
