<PAGE>
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 July 2, 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 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 August 15, 1995: 24,701,874 shares of
Common Stock, $0.10 par value per share.
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<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
INTERMET CORPORATION
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
<CAPTION>
Dec 31 July 2
1994 1995
------ ------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 13,718 $ 7,366
Accounts receivable:
Trade, less allowance for
doubtful accounts of $687
in 1994 and $807 in 1995 65,851 75,446
Other 7,176 7,022
-------- --------
73,027 82,468
Inventories 32,626 33,203
Other current assets 3,246 4,236
-------- --------
Total current assets 122,617 127,273
Property, plant and equipment,
at cost 349,097 365,205
Less:
Foreign industrial development
grants, net of amortization 5,280 5,683
Accumulated depreciation and
amortization 177,934 196,640
------- -------
Net property, plant
and equipment 165,883 162,882
Other noncurrent assets 17,764 14,955
-------- ---------
$306,264 $305,110
======== ========
</TABLE>
See accompanying notes.
<PAGE>
<PAGE>
<TABLE>
INTERMET CORPORATION
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
<CAPTION>
Dec 31 July 2
1994 1995
------ ------
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable $ 39,034 $ 32,850
Income taxes 3,257 14,206
Accrued liabilities 31,553 39,586
Notes payable 7,670 899
Long-term debt due within one year 12,017 9,395
-------- --------
Total current liabilities 93,531 96,936
Noncurrent liabilities:
Long-term debt due after one year 87,698 62,882
Retirement benefits 43,906 44,597
Other noncurrent liabilities 10,321 11,502
------- -------
Total noncurrent liabilities 141,925 118,981
Minority interests 2,837 2,837
Shareholders' equity:
Common stock 2,464 2,469
Capital in excess of par value 52,150 52,449
Retained earnings 11,730 27,787
Accumulated translation adjustments 2,959 4,954
Minimum pension liability adjustment (1,164) (1,164)
Unearned restricted stock ( 168) ( 139)
------- ------
Total shareholders' equity 67,971 86,356
------- ------
$306,264 $305,110
======== ========
</TABLE>
See accompanying notes.
<PAGE>
<PAGE>
<TABLE>
INTERMET CORPORATION
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands of dollars, except per share data)
<CAPTION>
Three months ended Six months ended
------------------ -----------------
July 3 July 2 July 3 July 2
1994 1995 1994 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net sales $124,582 $149,035 $243,471 $302,313
Cost of sales 109,408 121,575 214,710 253,203
-------- -------- -------- --------
Gross profit 15,174 27,460 28,761 49,110
Operating expenses:
Selling 1,474 1,055 2,890 2,371
General and administrative 6,760 6,925 13,829 13,352
------- -------- -------- -------
Total operating expenses 8,234 7,980 16,719 15,723
------- -------- -------- -------
Operating profit 6,940 19,480 12,042 33,387
Other income and expenses:
Interest income 20 34 87 64
Interest expense (1,567) (1,845) (2,964) (4,000)
Other, net 34 ( 49) 126 ( 110)
------- ------- ------ -------
Total other income and
expenses (1,513) (1,860) (2,751) (4,046)
------- ------- ------- ------
Income before income taxes
and minority interest 5,427 17,620 9,291 29,341
Provision for income taxes 2,988 8,083 5,142 13,284
------- ------- ------- -------
Net income $ 2,439 $ 9,537 $ 4,149 $ 16,057
======== ======== ======== ========
Earnings per share $ 0.10 $ 0.39 $ 0.17 $ 0.65
======== ======== ======== ========
</TABLE>
See accompanying notes.
<PAGE>
<PAGE>
<TABLE>
INTERMET CORPORATION
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands of dollars)
<CAPTION>
Six months ended
----------------
July 3 July 2
1994 1995
------ ------
<S> <C> <C>
Operating activities:
Net income $ 4,149 $ 16,057
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 13,630 17,167
Deferred income taxes 2,132 ( 147)
Other ( 280) 10
Changes in assets and liabilities:
Accounts receivable (18,463) ( 7,252)
Inventories 1,726 96
Accounts payable and accrued
liabilities ( 1,083) 10,509
Other assets and liabilities 3,292 ( 101)
------- -------
Net cash provided by operating activities 5,103 36,339
Investing activities:
Additions to property, plant and equipment (12,949) ( 8,893)
Other ( 263) 1,069
------- -------
Net cash used in investing activities (13,212) ( 7,824)
------- -------
Financing activities:
Increase in borrowings 3,530 -
Reduction in borrowings ( 2,312) (35,501)
Other 108 304
------- -------
Net cash provided by (used in)
financing activities 1,326 (35,197)
------- -------
Effect of exchange rate changes on cash
and cash equivalents ( 15) 330
------- -------
Net decrease in cash and cash equivalents ( 6,798) ( 6,352)
Cash and cash equivalents at beginning of
period 11,240 13,718
------- -------
Cash and cash equivalents at end of period $ 4,442 $ 7,366
======== =======
</TABLE>
See accompanying notes.
<PAGE>
<PAGE>
INTERMET CORPORATION
NOTES TO INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
1. The condensed consolidated balance sheet at December 31,
1994 has been derived from audited consolidated financial statements.
The interim condensed consolidated financial statements at July 2, 1995
and for the periods ended July 3, 1994 and July 2, 1995 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 July 2, 1995 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 July 2
1994 1995
------ ------
<S> <C> <C>
Finished goods $ 4,350 $ 6,102
Work in process 4,032 3,770
Raw materials 6,566 4,836
Supplies and patterns 17,678 18,495
-------- -------
$ 32,626 $33,203
======== =======
</TABLE>
3. Property, plant and equipment consist of the following (in
thousands of dollars):
Dec 31 July 2
1994 1995
------ ------
Land $ 3,699 $ 3,716
Buildings and improvements 77,514 80,181
Machinery and equipment 253,518 265,790
Construction in progress 14,366 15,518
--------- ---------
$ 349,097 $ 365,205
========= =========
4. Long-term debt consists of the following (in thousands
of dollars):
<TABLE>
<CAPTION>
Dec 31 July 2
1994 1995
------ ------
<S> <C> <C>
Intermet $ 85,162 $ 60,797
Subsidiaries 14,553 11,480
--------- --------
Total long-term debt 99,715 72,227
Less amounts due within one year 12,017 9,395
--------- --------
$ 87,698 $ 62,882
========= ========
</TABLE>
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
Material Changes in Financial Condition
---------------------------------------
The Company's financial position improved significantly
during the first half of the year. Due in large part to higher
earnings and a reduced level of capital expenditures, funded debt
was reduced over $34 million and the debt-to-capital ratio
dropped to 46% from 61% at the end of 1994.
In the first half of 1995 the Company charged a total of
$2.5 million against reserves established in 1993 and 1994 for
restructuring, severance and retirement pay. Amounts paid
consisted primarily of severance and retirement pay and related
benefit costs. This activity will continue throughout the
balance of the year.
Material Changes in Results of Operations
-----------------------------------------
Sales in the second quarter rose more than $24 million (20%)
from the second quarter of 1994. This brought the year-to-date
increase over the previous year to almost $59 million (24%).
Sales were higher both in the U.S. and Europe as the Company's
principal market, automobiles and light trucks, remained
relatively strong. Over $10 million of the second quarter sales
growth and more than $24 million of the year-to-date growth
resulted from the new production line added at the Company's New
River foundry in Virginia. This line was not operating in the
first half of last year. In addition, a stronger German mark
contributed $4 million to the second quarter rise in sales and
over $7 million to the year-to-date figure. The sales growth is
expected to be much lower in the last half of 1995. The U.S.
automotive market has recently softened, although management
expects there will be some rebound in the fall. The year-to-year
change from New River will also be smaller in the last half of
the year.
Gross profit was up significantly compared to the prior year
for both the second quarter and first six months of 1995.
Margins were also better, improving to 18.4% and 16.2% of sales
for the second quarter and first half of 1995, respectively.
Prior year figures for comparable periods were 12.2% and 11.8%,
respectively. Most plants continued to experience better margins
than last year.
Improved margins combined with higher sales led to operating
profit more than doubling, both in dollars and as a percent of
sales, for the second quarter and first six months compared to
the same periods last year. Although third and fourth quarter
sales are expected to be below levels achieved in the first half
of 1995, management expects operating profit margins to remain
well above prior year levels for the balance of the year.
Interest expense in the second quarter increased $0.3
million from the same period last year. Most of this increase
was the result of interest capitalized in 1994 related to the
<PAGE>
<PAGE>
expansion of the New River foundry. Although debt was reduced
significantly in the second quarter, higher domestic borrowing
rates offset the effect of this debt reduction on interest
expense. Interest expense for the first six months of 1995 was
$1 million higher than the prior year. Most of this increase was
also the result of interest capitalized in 1994. The balance was
due to higher domestic borrowing rates which offset the effect of
debt reductions.
The Company's effective income tax rate was 46% in the
second quarter and 45% for the first half of 1995. In 1994 the
effective income tax rate was 55% for both the second quarter and
first half of the year. A greater portion of consolidated pretax
income was earned in the U.S. in 1995. This reduced the effect
of foreign tax rates, which are higher than domestic rates, on
the overall effective income tax rate. Higher pretax income also
mitigated the effect on the overall tax rate of nondeductible
charges and differences in state income tax rates among the U.S.
subsidiaries.
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
In August 1991 Lunchburg 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
alleged certain violations by Lynchburg of the
Resource Conversation and Recovery Act, the most
significant of which related to the treatment of
certain hazardous waste at two of Lunchburg's
foundries. In November 1994 Lunchburg signed a consent
order agreeing to pay a penalty of $330,000. Payment of
this amount has not yet been required.
The Registrant 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. The Attorney General's office has advised
the Registrant that it could avoid litigation with
respect to such violations by entering into a consent
order. The Attorney General's most recent proposal
includes a penalty of approximately $250,000, but this
matter has not been settled.
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults upon Senior Securities
--------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
----------------------------------------------------
The Annual Meeting of Shareholders was held on April 27,
1995. The following persons were nominated and elected
to serve on the Board of Directors until the next annual
meeting and until their successors are elected and
qualified:
<PAGE>
<PAGE>
Voted For Withheld
--------- --------
John Doddridge 20,884,278 474,972
Vernon R. Alden 20,862,075 497,175
J. Frank Broyles 20,849,938 509,132
J. Patrick Crecine 20,862,375 496,875
Anton Dorfmueller, Jr. 20,862,375 496,875
John B. Ellis 20,862,375 496,875
Wilfred E. Gross, Jr. 20,861,027 498,223
A. Wayne Hardy 20,753,436 605,814
George W. Mathews, Jr. 20,839,457 519,793
Harold C. McKenzie, Jr. 20,887,274 471,976
J. Mason Reynolds 20,862,511 496,739
Curtis W. Tarr 20,848,832 510,418
In addition, the shareholders approved the Intermet
Corporation Executive Stock Option and Incentive Award
Plan and the appointment of Ernst & Young LLP as the
Company's independent auditors for 1995. Vote totals
were as follows:
Executive
Stock Option Appointment
and Incentive of
Award Plan Auditors
------------- ------------
Voting for 15,109,884 20,877,866
Voting against 1,535,461 29,749
Abstentions 738,844 451,635
Broker Non-Vote 3,975,061 -
A total of 3,302,975 shares were not voted.
Item 5. Other Information
-----------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) The following Exhibits are filed as part of
this report:
Exhibit
Number Description
------- ---------------------------------------
11.1 Computation of Earnings per Common Share
27.1 Financial Data Schedule
(b) None
<PAGE>
<PAGE>
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 Account Officer)
DATE: August 15, 1995
------------------
<PAGE>
<PAGE>
EXHIBIT INDEX
--------------
Exhibit
Number Description
------- ---------------------------------------
11.1 Computation of Earnings per Common Share
27.1 Financial Data Schedule
<PAGE>
<PAGE>
Exhibit 11.1
<TABLE>
INTERMET CORPORATTION
COMPUTATION OF EARNINGS PER COMMON SHARE
(In thousands, except per share data)
<CAPTION>
Three months ended
Six months ended
------------------
----------------
July 3 July 2
July 3 July 2
1994 1995
1994 1995
------ ------
------ -------
<S> <C> <C>
<C> <C> <C>
Net income $ 2,439 $ 9,537 $
4,149 $16,057
======== ========
========= =======
Weighted average number of
shares outstanding 24,581 24,674
24,579 24,663
Dilutive effect of
outstanding options 76 101
100 76
------- --------
-------- -------
Weighted average number of
shares and equivalent
shares outstanding 24,657 24,775
24,679 24,739
======= ========
======== =======
Earnings per share $ .10 $ 0.39 $
0.17 $ 0.65
======= ========
======== ========
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000745287
<NAME> INTERMET CORPORATION
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUL-02-1995
<EXCHANGE-RATE> 1
<CASH> 7,366
<SECURITIES> 0
<RECEIVABLES> 76,253
<ALLOWANCES> 807
<INVENTORY> 33,203
<CURRENT-ASSETS> 127,273
<PP&E> 365,205
<DEPRECIATION> 196,640
<TOTAL-ASSETS> 305,110
<CURRENT-LIABILITIES> 96,936
<BONDS> 0
<COMMON> 54,918
0
0
<OTHER-SE> 31,438
<TOTAL-LIABILITY-AND-EQUITY> 305,110
<SALES> 302,313
<TOTAL-REVENUES> 302,313
<CGS> 253,203
<TOTAL-COSTS> 268,926
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,000
<INCOME-PRETAX> 29,341
<INCOME-TAX> 13,284
<INCOME-CONTINUING> 16,057
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,057
<EPS-PRIMARY> 0.65
<EPS-DILUTED> 0.65
</TABLE>
