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<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
--------------------------------------
For the Quarterly Period Ended January 31, 1994 Commission file number 0685
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PETROLITE CORPORATION
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(Exact name of Registrant as specified in its charter)
Delaware 43-0617572
- ----------------------------------- -----------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
369 Marshall Avenue, St. Louis, Missouri 63119
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 961-3500
----------------------------
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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 (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
---- ----
On February 1, 1994, there were 11,294,271 outstanding shares
of capital stock, without par value.
No. of Pages 7
<PAGE> 2
<TABLE>
PART 1. ITEM 1. FINANCIAL STATEMENTS
PETROLITE CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
(Unaudited)
Jan. 31, 1994 Oct. 31, 1993
------------- -------------
(Thousands of $)
<S> <C> <C>
ASSETS
- ------
Current Assets
Cash and cash equivalents $ 5,489 $ 8,036
Securities 763 763
Accounts receivable, less estimated doubtful accounts of
$1,453,000 and $1,285,000, respectively 75,304 71,978
Inventories-
Raw materials, parts and supplies 28,047 26,731
Finished goods 34,965 34,435
Reserve for revaluation of inventories to LIFO cost (18,718) (17,017)
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44,294 44,149
Contracts in process 958 575
Less progress billings (866) (578)
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Net inventories 44,386 44,146
Other current assets 2,444 6,492
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Total Current Assets 128,386 131,415
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Patents and other intangibles 19,948 18,755
Investment in Affiliated Companies 9,296 9,309
Other Assets 18,306 17,565
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47,550 45,629
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Properties
Buildings 66,792 66,754
Machinery and equipment 206,794 205,703
Construction in progress 7,831 8,498
Accumulated depreciation (166,437) (164,266)
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114,980 116,689
Land 7,411 7,412
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122,391 124,101
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Total Assets $ 298,327 $ 301,145
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
Short-term borrowings $ 13,617 $ 9,920
Accounts payable 32,942 42,183
Income taxes payable 10,597 9,383
Accrued vacation pay 4,070 4,070
Other current liabilities 7,135 7,799
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Total Current Liabilities 68,361 73,355
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Other Liabilities
Long term debt 40,000 40,000
Retiree medical benefits 10,885 10,750
Other liabilities 2,332 2,341
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53,217 53,091
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Deferred Income Taxes, net 9,525 11,562
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Total Liabilities 131,103 138,008
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Stockholders' Equity
Capital stock, without par value-
Authorized - 35,000,000 shares
Issued - 12,201,597 and 12,196,497, respectively 8,840 8,694
Accumulated earnings retained for use in the business 185,390 181,101
Cumulative translation adjustment (7,757) (7,409)
Less treasury stock, at cost (907,326 shares) (19,249) (19,249)
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Total Stockholders' Equity 167,224 163,137
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Total Liabilities and Stockholders' Equity $ 298,327 $ 301,145
========= =========
</TABLE>
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<PAGE> 3
<TABLE>
PETROLITE CORPORATION
CONSOLIDATED STATEMENTS OF CURRENT AND ACCUMULATED EARNINGS
FOR THREE MONTHS ENDED JANUARY 31
<CAPTION>
(Unaudited)
1994 1993
----------- ------------
(In thousands, except per share data)
<S> <C> <C>
Net revenues $91,796 $80,163
Cost of product sold and other direct costs 53,695 46,320
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Gross profit 38,101 33,843
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Expenses:
Selling 20,809 18,205
Research 3,094 2,890
General and administrative 5,783 5,399
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29,686 26,494
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Earnings from operations 8,415 7,349
Equity in earnings (loss) of affiliates 86 (123)
Other income (expense), net (139) 86
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Earnings before income taxes and effect of
changes in accounting principles 8,362 7,312
U.S. and foreign income taxes 2,948 2,486
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Net earnings before effect of changes
in accounting principles 5,414 4,826
Effect of changes in accounting principles 2,037 (6,500)
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Net earnings (loss) $ 7,451 $(1,674)
======= ========
Earnings per share before effect of changes in
accounting principles $ .48 $ .43
Effect of changes in accounting principles .18 (.58)
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Earnings (loss) per share $ .66 $ (.15)
======= ========
Average shares outstanding 11,293 11,281
======= =======
Dividends per share $ .28 $ .28
======= =======
</TABLE>
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<PAGE> 4
<TABLE>
PETROLITE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THREE MONTHS ENDED JANUARY 31
<CAPTION>
(Unaudited)
1994 1993
----------- ------------
(Thousands of $)
<S> <C> <C>
Cash Flows from Operating Activities:
Net earnings (loss) $ 7,451 $(1,674)
Adjustments to reconcile net earnings to net cash
provided by operations -
Depreciation 5,036 3,813
Changes in Accounting Principles (2,037) 6,500
Changes in assets and liabilities -
Accounts receivable (3,326) 1,279
Inventories (240) 1,281
Other current assets 4,048 (1,577)
Accounts payable and accrued liabilities (9,203) (140)
Other (784) (1,412)
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Net cash provided by operating activities 945 8,070
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Cash flow from Investing Activities:
Capital expenditures, net (3,462) (5,766)
Participation in Business Alliance (675) (675)
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Net cash used in investing activities (4,137) (6,441)
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Cash Flows from Financing Activities:
Additional debt, (reduction of debt), net 3,661 (211)
Dividends paid (3,162) (3,159)
Other 146 0
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Net cash used in financing activities 645 (3,370)
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Decrease in Cash and Equivalents (2,547) (1,741)
Cash and Equivalents at Beginning of Period 8,036 8,812
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Cash and Equivalents at End of Period $ 5,489 $ 7,071
======= =======
</TABLE>
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<PAGE> 5
PART 1. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The registrant's financial position at January 31, 1994
reflected a strong current ratio of 1.9:1, a low debt to equity
ratio of .3:1, and cash and securities of $6.3 million.
Capital expenditures in fiscal 1994 are projected to be
approximately $23 million which is greater than fiscal 1993 capital
expenditures of almost $20 million. Larger projects for fiscal 1994
include a new semi-bulk distribution facility at the Bayport
chemical manufacturing plant, replacement of the existing aircraft,
and new laboratory and manufacturing office facilities for Eurochem
operations in Kirkby, England. Capital expenditures during the
first quarter were $3.5 million.
First quarter revenues totaled $93.6 million, compared with
$80.2 million the year before. Revenues for the Industrial,
International and Tretolite divisions of the Chemicals Group showed
strong improvement resulting in a double digit increase over the
prior period. This increase was due in part to the prior year
Welchem acquisition, a strong demand for cold flow improvers due to
colder temperatures, and an increase in hydrogen sulfide abatement
programs in both domestic and international markets. The Eurochem
division increased its sales due primarily to higher demand for oil
treatment programs in the Middle East while the Polymers division
revenues decreased modestly. Petreco Division revenues were up
sharply as equipment shipments increased.
Net earnings in the first quarter, before adoption of
accounting changes in both the current and prior periods, increased
12% to $5.4 million or $.48 per share, from $4.8 million, or $.43
per share. The aforementioned accounting changes consisted of a
one-time, non-cash tax credit of $2.0 million, or $.48 per share
taken this quarter applicable to the adoption of FAS 109 and a non-
recurring charge of $6.5 million, or $.58 per share, taken a year
ago to cover medical and
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<PAGE> 6
other post-retirement benefits associated with the adoption of FAS 106. Net
earnings inclusive of the above accounting changes were $7.5 million, or $.66
per share this year as compared to a net loss of $1.7 million or $.15 per share
last year.
For the Chemicals Group, the improvement in earnings was
reflective of the improvement in revenues for the Industrial and
International divisions. Margins in the Tretolite division,
however, continued to be squeezed in the highly competitive domestic
oilfield market, and the division posted a decline in earnings. The
Polymers division posted improved earnings due to a more favorable
product mix while both the Eurochem and Petreco divisions improved
earnings were due to increased revenues.
PART II - OTHER INFORMATION
Part II. Item 1. Legal Proceedings
None
Part II. Item 2. Changes in Securities
None
Part II. Item 3. Defaults upon senior securities
None
Part 2, Item 4. Submission of Matters to a Vote of Security-Holders.
None
Part 2, Item 5. Other information
None
Part 2, Item 6. Exhibits and Reports on Form 8-K
None
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<PAGE> 7
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.
PETROLITE CORPORATION
---------------------
(Registrant)
s/JOHN M. CASPER
--------------------------
John M. Casper
Chief Financial Officer -
Authorized Officer and
Principal Financial Officer
DATE: March 17, 1994
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