<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 April 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 May 9, 1995: 24,671,225 shares of
Common Stock, $0.10 par value per share.
<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
INTERMET CORPORATION
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
<CAPTION>
Dec 31 April 2
1994 1995
------ -------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 13,718 $ 12,704
Accounts receivable:
Trade, less allowance for
doubtful accounts of $687
in 1994 and 1995 65,851 79,733
Other 7,176 5,264
-------- -------
73,027 84,997
Inventories 32,626 31,968
Other current assets 3,246 4,214
-------- -------
Total current assets 122,617 133,883
Property, plant and equipment,
at cost 349,097 360,409
Less:
Foreign industrial development
grants, net of amortization 5,280 5,829
Accumulated depreciation and
amortization 177,934 190,105
------- -------
Net property, plant
and equipment 165,883 164,475
Other noncurrent assets 17,764 17,091
------- -------
$306,264 $315,449
======== ========
</TABLE>
See accompanying notes.
2<PAGE>
<PAGE>
<TABLE>
INTERMET CORPORATION
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
<CAPTION>
Dec 31 April 2
1994 1995
------ -------
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 39,034 $ 34,056
Income taxes 3,257 8,830
Accrued liabilities 31,553 39,281
Notes payable 7,670 6,035
Long-term debt due within one year 12,017 13,145
-------- --------
Total current liabilities 93,531 101,347
Noncurrent liabilities:
Long-term debt due after one year 87,698 79,585
Retirement benefits 43,906 44,249
Other noncurrent liabilities 10,321 10,811
------- -------
Total noncurrent liabilities 141,925 134,645
Minority interests 2,837 2,837
Shareholders' equity:
Common stock 2,464 2,466
Capital in excess of par value 52,150 52,245
Retained earnings 11,730 18,250
Accumulated translation adjustments 2,959 4,976
Minimum pension liability adjustment (1,164) (1,164)
Unearned restricted stock ( 168) ( 153)
------ -------
Total shareholders' equity 67,971 76,620
-------- --------
$306,264 $315,449
======== ========
</TABLE>
See accompanying notes.
3
<PAGE>
<PAGE>
<TABLE>
INTERMET CORPORATION
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands of dollars, except per share data)
<CAPTION>
Three months ended
------------------
April 3 April 2
1994 1995
------- ------
<S> <C> <C>
Net sales $118,889 $153,278
Cost of sales 105,302 131,628
-------- --------
Gross profit 13,587 21,650
Operating expenses:
Selling 1,416 1,316
General and administrative 7,069 6,427
-------- -------
8,485 7,743
-------- -------
Operating profit 5,102 13,907
Other income and expenses:
Interest income 67 30
Interest expense (1,397) (2,155)
Other, net 92 ( 61)
------- -------
(1,238) (2,186)
------- -------
Income before income taxes 3,864 11,721
Provision for income taxes 2,154 5,201
------- -------
Net income $ 1,710 $ 6,520
======= =======
Earnings per share $0.07 $0.26
======= =======
</TABLE>
See accompanying notes.
4
<PAGE>
<PAGE>
<TABLE>
INTERMET CORPORATION
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands of dollars)
<CAPTION>
Three months ended
------------------
April 3 April 2
1994 1995
-------- --------
<S> <C> <C>
Operating activities:
Net income $ 1,710 $ 6,520
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 6,623 8,081
Other 75 ( 693)
Changes in assets and liabilities:
Accounts receivable ( 6,344) ( 9,651)
Inventories 3,876 1,271
Accounts payable and accrued
liabilities ( 331) 6,654
Other assets and liabilities 2,492 ( 805)
------- -------
Net cash provided by operating activities 8,101 11,377
------- -------
Investing activities:
Additions to property, plant and equipment ( 7,232) ( 3,691)
Other ( 294) 888
------- -------
Net cash used in investing actitivities ( 7,526) ( 2,803)
------- -------
Financing activities:
Reduction in borrowings ( 8,569) ( 9,516)
Other 48 97
------- -------
Net cash used in financing activities ( 8,521) ( 9,419)
Effect of exchange rate changes on cash
and cash equivalents ( 24) ( 169)
------- -------
Net decrease in cash and cash equivalents ( 7,970) ( 1,014)
Cash and cash equivalents at beginning of
period 11,240 13,718
------- -------
Cash and cash equivalents at end of period $ 3,270 $12,704
======== =======
</TABLE>
See accompanying notes.
5
<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 April 2,
1995 and for the periods ended April 3, 1994 and April 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 April 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 April 2
1994 1995
------ -------
<S> <C> <C>
Finished goods $ 4,350 $ 5,299
Work in process 4,032 3,524
Raw materials 6,566 5,401
Supplies and patterns 17,678 17,744
-------- -------
$ 32,626 $31,968
======== =======
</TABLE>
3. Property, plant and equipment consist of the following (in
thousands of dollars):
<TABLE>
<CAPTION>
Dec 31 April 2
1994 1995
------ -------
<S> <C> <C>
Land $ 3,699 $ 3,716
Buildings and improvements 77,514 79,772
Machinery and equipment 253,518 260,742
Construction in progress 14,366 16,179
---------- ----------
$ 349,097 $ 360,409
========== ==========
</TABLE>
4. Long-term debt consists of the following (in thousands
of dollars:
<TABLE>
<CAPTION>
Dec 31 April 2
1994 1995
------ -------
<S> <C> <C>
Intermet $ 85,162 $ 80,797
Subsidiaries 14,553 11,933
--------- --------
Total long-term debt 99,715 92,730
Less amounts due within one year 12,017 13,145
--------- --------
$ 87,698 $ 79,585
========= ========
</TABLE>
6<PAGE>
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 3 April 2
1994 1995
------- ------
<S> <C> <C>
Provision for income taxes at
U.S. statutory rate $ 1,352 $ 4,102
Charges with no tax effect 292 167
Difference between U.S. and
foreign tax rates 189 551
State income taxes net of
federal benefit 286 389
Other 35 ( 8)
--------- --------
$ 2,154 $ 5,201
========= ========
</TABLE>
7
<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 during the first quarter.
Due in large part to higher earnings and a reduced level of capital
expenditures, funded debt was reduced by $9.6 million and the debt-to-capital
ratio dropped to 56% from 61% at the end of 1994. Management expects further
reductions in funded debt as the year progresses.
In the first quarter of 1995 the Company charged a total of $1.3 million
against reserves established in 1993 and 1994 for restructuring, severance and
retirement pay. This activity was funded by cash from operations, and will
continue throughout the year.
Material Changes in Results of Operations
- -----------------------------------------
Sales in the first quarter rose more than $34 million (29%) over the
first quarter of 1994. Sales were higher both in the U.S. and Europe as
the Company's principal market, automobiles and light trucks, remained
strong. Almost $14 million of the domestic sales growth was a result
of a 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.
Sales in the second quarter of 1995 are expected to be well above
prior year amounts as well, for the same reasons noted above.
However, the sales growth rate is expected to be much lower in the
last half of 1995 as most plants are now operating at full capacity
on all production lines. In addition, the U.S. automotive market is
showing signs it may be softening.
Gross profit was up significantly compared to the prior year. Margins
were also better, improving to 14.1% of sales from 11.4% in the first quarter
of 1994. Almost all plants experienced better margins than last year.
Operating expenses dropped to $7.7 million in the first quarter from
$8.5 million in 1994, due largely to a reduced salaried workforce.
The decrease in operating expenses combined with higher gross margins
resulted in operating profit more than doubling, both in dollars and as a
percent of sales, compared to last year. If sales remain near current
levels, management expects operating profit to remain well above prior year
levels for the balance of the year.
8<PAGE>
Interest expense in the first quarter increased $758,000 from the same
period last year. Over $400,000 of this increase was the result of interest
capitalized in 1994 related to the expansion of the New River foundry. The
balance was due primarily to higher domestic borrowing rates.
The Company's effective income tax rate varied for the reasons set forth
in Note 5 to the interim condensed consolidated financial statements.
9<PAGE>
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
alleged certain violations by Lynchburg of the
Resource Conservation and Recovery Act, the most
significant of which related to the treatment of
certain hazardous waste at two of Lynchburg's
foundries. In November 1994 Lynchburg signed a
consent order agreeing to pay a penalty of $330,000.
The Registrant expects to pay the penalty in 1995,
but has not yet been required to do so.
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 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. In April 1995 the Attorney General's
office proposed a penalty of approximately $228,000.
The Registrant intends to try to negotiate a lower
settlement.
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
10<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) The following Exhibit is filed as a part of
this report:
Exhibit
Number Description
------- ----------------------------------------
11.1 Computation of Earnings per Common Share
27.1 Financial Data Schedule
(b) None
11
<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 Accounting Officer)
DATE: May 10, 1995
12<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- ----------------------------------
11 Computation of Earnings per Common
Shares
27 Financial Data Schedule
13<PAGE>
EXHIBIT 11
<TABLE>
INTERMET CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE
(In thousands, except per share data)
<CAPTION>
Three months ended
------------------
April 3 April 2
1994 1995
------- -------
<S> <C> <C>
Net income $ 1,710 $ 6,520
======= =======
Weighted average number of
shares outstanding 24,577 24,652
Dilutive effect of
outstanding options 124 55
------- -------
Weighted average number of
shares and equivalent
shares outstanding 24,701 24,707
-------- --------
Earnings per share $ 0.07 $ 0.26
======== =======
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000745287
<NAME> INTERMET CORPORATION
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> APR-02-1995
<EXCHANGE-RATE> 1
<CASH> 12,704
<SECURITIES> 0
<RECEIVABLES> 80,420
<ALLOWANCES> 687
<INVENTORY> 31,968
<CURRENT-ASSETS> 133,883
<PP&E> 360,409
<DEPRECIATION> (190,105)
<TOTAL-ASSETS> 315,449
<CURRENT-LIABILITIES> 101,347
<BONDS> 0
<COMMON> 2,466
0
0
<OTHER-SE> 74,154
<TOTAL-LIABILITY-AND-EQUITY> 315,449
<SALES> 153,278
<TOTAL-REVENUES> 153,278
<CGS> 131,628
<TOTAL-COSTS> 139,371
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,155
<INCOME-PRETAX> 11,721
<INCOME-TAX> 5,201
<INCOME-CONTINUING> 6,520
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,520
<EPS-PRIMARY> 0.26
<EPS-DILUTED> 0.26
</TABLE>
