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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
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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 0-17028
IRONTON IRON, INC.
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(Exact name of registrant as specified in its charter)
Ohio 31-1117407
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(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
Suite 1600, 2859 Paces Ferry Road, Atlanta, Georgia 30339
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(Address of principal executive offices, including zip code)
(404) 431-6000
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(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: 23,000 shares of Common Stock, no par
value.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
IRONTON IRON, INC.
INTERIM CONDENSED BALANCE SHEETS
(In thousands of dollars)
Dec 31 July 2
ASSETS 1994 1995
------- ------
Current assets:
Cash $ 699 $ 486
Accounts receivable - trade 8,093 9,801
- other 712 584
Inventories 1,313 1,775
Other current assets 26 103
------ ------
Total current assets 10,843 12,749
Property, plant and equipment:
Land 295 295
Buildings and improvements 4,765 4,801
Machinery and equipment 24,240 24,796
Construction in progress 1,010 1,738
------ ------
30,310 31,630
Less accumulated depreciation 9,957 11,678
------ ------
20,353 19,952
Other assets 220 135
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$31,416 $32,836
======= =======
See accompanying notes.
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IRONTON IRON, INC.
INTERIM CONDENSED BALANCE SHEETS
(In thousands of dollars)
Dec 31 July 2
1994 1995
------ ------
LIABILITIES AND NET
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SHAREHOLDER'S DEFICIENCY
------------------------
Current liabilities:
Accounts payable $ 5,545 $ 4,308
Accrued wages and benefits 919 1,143
Accrued workers' compensation 546 359
Other accrued liabilities 1,463 1,543
-------- --------
Total current liabilities 8,473 7,353
Due to affiliates 37,002 31,947
Redeemable preferred stock 3,038 3,096
Net shareholder's deficiency:
Common stock 2,000 2,000
Additional paid-in capital 43,523 49,523
Accumulated deficit (62,620) (61,083)
-------- --------
Net shareholder's deficiency (17,097) ( 9,560)
-------- --------
$ 31,416 $ 32,836
======== ========
See accompanying notes.
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IRONTON IRON, INC.
INTERIM CONDENSED STATEMENTS OF OPERATIONS
(In thousands of dollars)
Three months ended Six months ended
------------------ ----------------
July 3 July 2 July 3 July 2
1994 1995 1994 1995
------ ------ ------ ------
Net sales $18,770 $20,822 $38,124 $41,054
Cost of sales 18,612 18,082 37,331 36,854
------- ------- ------- -------
Gross margin 158 2,740 793 4,200
Operating expenses - - - -
Corporate charges from
parent companies 1,145 793 2,323 1,767
------- ------- ------- -------
Operating profit (loss) ( 987) 1,947 ( 1,530) 2,433
Other income and expenses:
Interest income - - - -
Interest expense ( 612) ( 394) (1,247) ( 838)
------- ------- -------- -------
( 612) ( 394) (1,247) ( 838)
------- ------- -------- -------
Income (loss) before
income taxes (1,599) 1,553 ( 2,777) 1,595
Provision for income
taxes - - - -
------- ------ -------- -------
Net income (loss) $(1,599) $ 1,553 $( 2,777) $ 1,595
======= ======= ======== =======
See accompanying notes.
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<PAGE>
IRONTON IRON, INC.
INTERIM CONDENSED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
Six months ended
----------------
July 3 July 2
1994 1995
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Operating activities:
Net income (loss) $( 2,777) $ 1,595
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Depreciation and amortization 1,647 1,815
Other 12 -
Changes in assets and liabilities:
Accounts receivable (1,327) (1,580)
Inventories ( 286) ( 462)
Accounts payable and accrued
liabilities 1,698 (1,240)
Other assets and liabilities ( 92) ( 77)
------ ------
Net cash provided by (used in)
operating activities ( 1,125) 51
Investing activities:
Additions to property, plant and
equipment ( 2,000) (1,250)
Other 8 41
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Net cash used in investing activities ( 1,992) (1,209)
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Financing activities:
Increase in due to affiliates 3,547 945
-------- ------
Net cash provided by financing
activities 3,547 945
-------- ------
Net increase (decrease) in cash 430 ( 213)
Cash at beginning of period 508 699
------- -------
Cash at end of period $ 938 $ 486
======= =======
See accompanying notes.
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IRONTON IRON, INC.
NOTES TO INTERIM CONDENSED
FINANCIAL STATEMENTS
1. The condensed balance sheet at December 31, 1994 has
been derived from audited financial statements. The interim
condensed 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 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):
Dec 31 July 2
1994 1995
------ ------
Finished goods $ 356 $ 254
Work in process 400 573
Raw materials 365 783
Supplies and patterns 192 165
------ -----
$1,313 $1,775
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3. Effective January 1, 1995, the Company's parent, Intermet Foundries, Inc.,
contributed $6,000,000 of intercompany debt to additional paid in capital.
4. Because all common stock of the Company is owned by
Intermet Foundries, Inc., no income or loss per common share
information is included herein.
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Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
---------------------------------------------
Material Changes in Financial Condition
---------------------------------------
The Company's financial condition has slightly improved
since December 31, 1994. The Company generated positive cash from
operations due to better operating results. However, the Company
remains dependent on its parent companies, Intermet Foundries, Inc.
and Intermet Corporation, for continued financial support.
Material Changes in Results of Operations
-----------------------------------------
The foundry has been operating near capacity for more than a year, so net
sales showed only a modest increase in the second quarter and first six months
of 1995 compared to the prior year. Almost half of the current Ford I beam
business will phase out beginning in the fourth quarter of 1995. The Company
is working to secure replacement business.
Plant operations have continued to improve. Gross profit rose to
13.2% and 10.2% in the second quarter and first six months, respectively.
Gross profit margins for comparable periods in 1994 were 0.8% and 2.1%,
respectively. Corporate charges declined $0.4 million for the second
quarter and $0.6 million for the first six months compared to the prior
year as a result of a decline in the level of staff support provided by the
parent companies. All of the above led to the Company reporting a profit
in both the second quarter and first half of 1995, although cumulative
losses since 1988 when the Company was acquired by Intermet are still
almost $52 million.
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<PAGE>
II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Registrant has entered into negotiations with
the Office of the Ohio Attorney General with
respect to certain past violations by the
Registrant 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 Securities
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:
Exhibit 27 - Financial Data Schedule
(b) None<PAGE>
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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.
IRONTON IRON, INC.
By: /s/ Peter C. Bouxsein
------------------------------
Peter C. Bouxsein
Controller
(Principal Accounting Officer)
DATE: August 15, 1995
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EXHIBIT INDEX
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Exhibit Description
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27 Financial Data Schedule
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<ARTICLE> 5
<CIK> 0000771176
<NAME> IRONTON IRON, INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUL-02-1995
<EXCHANGE-RATE> 1
<CASH> 486
<SECURITIES> 0
<RECEIVABLES> 9,939
<ALLOWANCES> 138
<INVENTORY> 1,775
<CURRENT-ASSETS> 12,749
<PP&E> 31,630
<DEPRECIATION> 11,678
<TOTAL-ASSETS> 32,836
<CURRENT-LIABILITIES> 7,353
<BONDS> 0
<COMMON> 2,000
0
3,096
<OTHER-SE> (11,560)
<TOTAL-LIABILITY-AND-EQUITY> 32,836
<SALES> 41,054
<TOTAL-REVENUES> 41,054
<CGS> 36,854
<TOTAL-COSTS> 38,621
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 838
<INCOME-PRETAX> 1,595
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,595
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,595
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
