<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[Mark One]
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 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 33-11634
TRANS-RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-2729497
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9 West 57th Street, New York, New York 10019
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 888-3044
Indicate by check mark whether 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 registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO ____
At August 11, 1995, there were outstanding 3,000 shares of common stock, par
value of $.01 per share, all which were owned by TPR Investment Associates,
Inc., a privately-held Delaware corporation.
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Form 10-Q
TRANS-RESOURCES, INC.
Form 10-Q Index
June 30, 1995
Page
PART I Number
Item 1. - Financial Statements (Unaudited):
Consolidated Statements of Operations . . . . . . . . . . . . 3
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . 4
Consolidated Statement of Stockholder's Equity . . . . . . . 5
Consolidated Statements of Cash Flows . . . . . . . . . . . . 6
Notes to Unaudited Consolidated Financial Statements . . . . 7
Item 2. - Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . 8
PART II
Item 6. - Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 15
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2
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Form 10-Q
PART I. FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
TRANS-RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Month Period Six Month Period
Ended June 30, Ended June 30,
-------------------- --------------------
1995 1994 1995 1994
-------- -------- ------- --------
(000's)
<S> <C> <C> <C> <C>
REVENUES . . . . . . . . . . . . . . . . . . . . . . $107,342 $92,963 $199,731 $174,995
COST AND EXPENSES:
Cost of goods sold . . . . . . . . . . . . . . . 89,263 72,856 166,973 138,939
General and administrative . . . . . . . . . . . 10,454 9,748 20,213 19,532
--------- -------- --------- ---------
OPERATING INCOME . . . . . . . . . . . . . . . . . . 7,625 10,359 12,545 16,524
Interest expense . . . . . . . . . . . . . . . . (8,712) (7,452) (16,746) (14,368)
Interest and other income - net . . . . . . . . 3,262 (4,490) 4,023 15,251
--------- -------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES . . . . . . . . . . 2,175 (1,583) (178) 17,407
--------- -------- --------- ---------
INCOME TAX PROVISION:
Current . . . . . . . . . . . . . . . . . . . . 1,297 956 2,135 4,946
Deferred . . . . . . . . . . . . . . . . . . . . (340) 883 (62) 6,795
--------- -------- ---------- ---------
957 1,839 2,073 11,741
--------- -------- --------- ---------
NET INCOME (LOSS) . . . . . . . . . . . . . . . . . . $ 1,218 $ (3,422) $ (2,251) $ 5,666
========= ======== ========= =========
</TABLE>
See notes to unaudited consolidated financial statements.
3
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Form 10-Q
TRANS-RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
----------------------------
(Unaudited)
(000's)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents . . . . . . . . . . . . . . . . . $ 30,053 $ 15,571
Accounts receivable . . . . . . . . . . . . . . . . . . . . 77,583 66,106
Inventories:
Finished products . . . . . . . . . . . . . . . . . . . 30,574 33,747
Raw materials . . . . . . . . . . . . . . . . . . . . . 21,033 17,566
Other current assets . . . . . . . . . . . . . . . . . . . . 40,711 168,200
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . 18,503 18,852
-------- --------
Total Current Assets . . . . . . . . . . . . . . . . . . 218,457 320,042
PROPERTY, PLANT AND EQUIPMENT - NET . . . . . . . . . . . . . . . 220,629 202,085
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . 30,875 28,827
-------- --------
Total . . . . . . . . . . . . . . . . . . . . . . . . . $469,961 $550,954
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt . . . . . . . . . . . . $ 24,334 $124,465
Short-term debt . . . . . . . . . . . . . . . . . . . . . . 27,527 33,521
Accounts payable . . . . . . . . . . . . . . . . . . . . . . 53,485 57,077
Accrued expenses and other current liabilities . . . . . . . 35,278 38,685
-------- --------
Total Current Liabilities . . . . . . . . . . . . . . . 140,624 253,748
-------- --------
LONG-TERM DEBT-NET:
Senior indebtedness, notes payable and other obligations . . 136,332 102,059
Senior subordinated indebtedness - net . . . . . . . . . . . 140,525 140,385
Junior subordinated debentures - net . . . . . . . . . . . . 8,109 7,981
-------- --------
Long-Term Debt - net . . . . . . . . . . . . . . . . . . 284,966 250,425
-------- --------
OTHER LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . 26,622 26,231
-------- --------
STOCKHOLDER'S EQUITY:
Preferred stock, $1.00 par value, 100,000 shares
authorized, issued and outstanding . . . . . . . . . . . 7,960 7,960
Common stock, $.01 par value, 3,000 shares authorized,
issued and outstanding . . . . . . . . . . . . . . . . . -- --
Additional paid-in capital . . . . . . . . . . . . . . . . . 505 505
Retained earnings . . . . . . . . . . . . . . . . . . . . . 10,118 13,432
Cumulative translation adjustment . . . . . . . . . . . . . (631) (360)
Unrealized gains (losses) on marketable securities . . . . . (203) (987)
-------- --------
Total Stockholder's Equity . . . . . . . . . . . . . . . 17,749 20,550
-------- --------
Total . . . . . . . . . . . . . . . . . . . . . . . . . $469,961 $550,954
======== ========
</TABLE>
See notes to unaudited consolidated financial statements.
4
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Form 10-Q
TRANS-RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
Six Month Period Ended June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
ADDITIONAL CUMULATIVE UNREALIZED
PREFERRED COMMON PAID-IN RETAINED TRANSLATION GAINS(LOSSES)
STOCK STOCK CAPITAL EARNINGS ADJUSTMENT ON SECURITIES TOTAL
--------- ------ ---------- -------- ----------- ------------- -----
(000'S)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, January 1, 1995 . . $7,960 $ -- $505 $13,432 $(360) $(987) $20,550
Activity for the six month
period ended June 30, 1995:
Net loss . . . . . . . . . . (2,251) (2,251)
Dividends paid . . . . . . . (1,063) (1,063)
Net change during period . . (271) 784 513
------ ------ ---- -------- ----- ----- -------
BALANCE, June 30, 1995 . . . $7,960 $ -- $505 $ 10,118 $(631) $(203) $17,749
====== ====== ==== ======== ===== ===== =======
</TABLE>
See notes to unaudited consolidated financial statements.
5
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Form 10-Q
TRANS-RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Month Period
Ended June 30,
-------------------
1995 1994
---- ----
(000's)
<S> <C> <C>
OPERATING ACTIVITIES AND WORKING CAPITAL
MANAGEMENT:
Operations:
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . $ (2,251) $ 5,666
Items not requiring (providing) cash:
Depreciation and amortization . . . . . . . . . . . . . . 10,704 11,308
Increase in other liabilities . . . . . . . . . . . . . . 223 112
Deferred taxes and other - net . . . . . . . . . . . . . . 1,315 7,368
--------- ---------
Total 9,991 24,454
Working capital management:
Accounts receivable and other current assets . . . . . . . . . (5,975) (34,331)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . 3,593 13,867
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . 370 2,654
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . (5,651) 9,657
Accrued expenses and other current liabilities . . . . . . . . (8,517) 6,952
--------- ---------
Cash provided (used) by operations and working
capital management (6,189) 23,253
--------- ---------
INVESTMENT ACTIVITIES:
Additions to property, plant and equipment . . . . . . . . . . . . (25,810) (43,191)
Purchases of marketable securities and other short-term investments (4,339) (103,829)
Sales of marketable securities and other short-term investments . 130,488 23,790
Other - net . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,832) (141)
--------- ---------
Cash provided (used) by investment activities . . . . . . 95,507 (123,371)
--------- ---------
FINANCING ACTIVITIES:
Increase (decrease) in short-term debt . . . . . . . . . . . . . . (5,994) 6,407
Increase in long-term debt . . . . . . . . . . . . . . . . . . . . 42,500 161,132
Repurchases, payments and current maturities of long-term debt . . (110,279) (34,509)
Distributions to stockholder . . . . . . . . . . . . . . . . . . . (1,063) --
--------- ---------
Cash provided (used) by financing activities . . . . . . . (74,836) 133,030
--------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . . . . . 14,482 32,912
CASH AND CASH EQUIVALENTS:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . 15,571 25,742
--------- ---------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30,053 $ 58,654
========= =========
</TABLE>
See notes to unaudited consolidated financial statements.
6
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Form 10-Q
TRANS-RESOURCES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation and Other Matters
The consolidated financial statements of Trans-Resources, Inc. (the
"Company") include the Company and its direct and indirect subsidiaries, after
elimination of intercompany accounts and transactions. Effective March 31,
1995 the Company acquired the assets of Na-Churs Plant Food Company
("Na-Churs"), a company headquartered in Ohio and engaged in the specialty
plant nutrient business. The Company's principal subsidiaries are Cedar
Chemical Corporation ("Cedar"), and Cedar's two wholly-owned subsidiaries, New
Mexico Potash Corporation ("NMPC") and Vicksburg Chemical Company; Na-Churs;
Eddy Potash, Inc. ("Eddy"); and Haifa Chemicals Ltd., an Israeli corporation
("HCL"), and HCL's wholly-owned subsidiary, Haifa Chemicals South Ltd.
("HCSL"). The Company is a wholly-owned subsidiary of TPR Investment
Associates, Inc., a privately-held corporation. Certain prior period amounts
have been reclassified to conform to the manner of presentation in the current
period.
In the opinion of management, the unaudited consolidated financial
statements for the six month periods ended June 30, 1995 and 1994,
respectively, include all adjustments, which comprise only normal recurring
accruals, necessary for a fair presentation of the results for such periods.
The results of operations for the six month period ended June 30, 1995 are not
necessarily indicative of results that may be expected for any other interim
period or the full fiscal year. It is suggested that these unaudited
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 (the "Form 10-K") which has
been filed with the Securities and Exchange Commission.
7
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following table sets forth, as a percentage of revenues and the
percentage dollar change of those items as compared to the prior period,
certain items appearing in the unaudited consolidated financial statements of
the Company.
<TABLE>
<CAPTION>
Percentage Percentage
of Revenues Period of Revenues Period
----------- to ----------- to
Three Month Period Six Month Period
Period Ended Changes Period Ended Changes
June 30, ---------- June 30, ---------
------------- Increase ------------- Increase
1995 1994 (Decrease) 1995 1994 (Decrease)
---- ---- ---------- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C>
Revenues . . . . . . . . . . . . . . . . 100.0% 100.0% 15.5% 100.0% 100.0% 14.1%
Costs and expenses:
Cost of goods sold . . . . . . . . . 83.2 78.4 22.5 83.6 79.4 20.2
General and administrative expense . 9.7 10.5 7.2 10.1 11.2 3.5
---- ---- ---- ----
Operating income . . . . . . . . . . . . 7.1 11.1 (26.4) 6.3 9.4 (24.1)
Interest expense . . . . . . . . . . (8.1) (8.0) 16.9 (8.4) (8.2) 16.6
Interest and other income - net . . 3.0 (4.8) 172.7 2.0 8.7 (73.6)
---- ----- ---- ----
Income (loss) before income taxes . . . . 2.0 (1.7) 237.4 (.1) 9.9 (101.0)
Income tax provision . . . . . . . . . . .9 2.0 (47.9) (1.0) 6.7 (82.3)
---- ---- ---- ----
Net income (loss) . . . . . . . . . . . . 1.1% (3.7)% 135.6% (1.1)% 3.2% (139.7)%
==== ==== ===== ==== ==== ======
</TABLE>
8
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Form 10-Q
RESULTS OF OPERATIONS
Three month period ended June 30, 1995 compared with the three month
period ended June 30, 1994:
Revenues increased by 15.5% to $107,342,000 in 1995 from $92,963,000 in
1994, an increase of $14,379,000, resulting from increased sales of specialty
plant nutrients and industrial chemicals ($18,000,000) (including $7,000,000
relating to the acquisition of Na-Churs), which were partially offset by lower
sales of organic chemicals ($600,000) and potash ($3,000,000).
Cost of goods sold as a percentage of revenues increased during the
period (83.2% in 1995 compared with 78.4% in 1994), primarily due to certain
raw material cost increases, which were partially offset by increases in the
selling prices of the Company's products, and, to a lesser extent, the normal
costs associated with the initial run-in periods of the Company's newly-
constructed manufacturing facilities. Gross profit was $18,079,000 in 1995
compared with $20,107,000 in 1994 (16.8% of revenues in 1995 compared with
21.6% of revenues in 1994), a decrease of $2,028,000. General and
administrative expense increased to $10,454,000 in 1995 from $9,748,000 in 1994
(9.7% of revenues in 1995 compared with 10.5% of revenues in 1994). Pursuant
to an agreement during the 1995 period, the Company recorded a $750,000
reimbursement of certain general and administrative expenses incurred in prior
years on behalf of an entity in which the Company has an investment.
As a result of the matters described above, the Company's operating
income decreased by $2,734,000 to $7,625,000 in 1995 as compared with
$10,359,000 in 1994.
Interest expense increased by $1,260,000 ($8,712,000 in 1995 compared
with $7,452,000 in 1994) primarily as a result of (i) the long-term debt that
financed the construction of the K3 Plant (as defined below) and (ii) the June
30, 1994 loan agreement (the "Loan Agreement") described under "Capital
Resources and Liquidity" below. Interest and other income - net increased in
1995 by $7,752,000, principally as the result of the net adjustments relating
to the marking-to-market of forward exchange contracts which do not qualify as
hedges. In addition, the 1995 period includes interest income of approximately
$800,000 relating to a prior year tax refund, while the 1994 period includes an
$800,000 loss provision relating to the February 1994 fire at HCL.
9
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As a result of the above factors, income before income taxes increased
by $3,758,000 in 1995. The Company's provisions for income taxes are impacted
by the mix between domestic and foreign earnings and vary from the U.S. Federal
statutory rate principally due to the impact of foreign operations and certain
losses for which there is no current tax benefit.
Six month period ended June 30, 1995 compared with the six month period
ended June 30, 1994:
Revenues increased by 14.1% to $199,731,000 in 1995 from $174,995,000
in 1994, an increase of $24,736,000, resulting from increased sales of
specialty plant nutrients and industrial chemicals ($26,800,000) (including
$7,000,000 relating to the acquisition of Na-Churs) and organic chemicals
($300,000), which were partially offset by lower potash sales ($2,400,000).
Cost of goods sold as a percentage of revenues increased during the
period (83.6% in 1995 compared with 79.4% in 1994), primarily due to certain
raw material cost increases, which were partially offset by increases in the
selling prices of the Company's products, and, to a lesser extent, the normal
costs associated with the initial run-in periods of the Company's newly-
constructed manufacturing facilities. Gross profit was $32,758,000 in 1995
compared with $36,056,000 in 1994 (16.4% of revenues in 1995 compared with
20.6% of revenues in 1994), a decrease of $3,298,000. General and
administrative expense increased to $20,213,000 in 1995 from $19,532,000 in
1994 (10.1% of revenues in 1995 compared with 11.2% of revenues in 1994).
Pursuant to an agreement during the 1995 period, the Company recorded a
$750,000 reimbursement of certain general and administrative expenses incurred
in prior years on behalf of an entity in which the Company has an investment.
As a result of the matters described above, the Company's operating
income decreased by $3,979,000 to $12,545,000 in 1995 as compared with
$16,524,000 in 1994.
Interest expense increased by $2,378,000 ($16,746,000 in 1995 compared
with $14,368,000 in 1994) primarily as a result of (i) the long-term debt that
financed the construction of the K3 Plant and (ii) the June 30, 1994 loan
agreement (the "Loan Agreement") described under "Capital Resources and
Liquidity" below. Interest and other income - net decreased in 1995 by
$11,228,000, principally as the result of the 1994 period including a gain of
approximately $18,700,000 relating to the February 1994 fire at HCL as compared
to a
10
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$1,700,000 gain in the 1995 period relating to such fire, with the
remainder of the decrease in the 1995 period primarily attributable to the net
adjustments relating to the marking-to-market of forward exchange contracts
which do not qualify as hedges.
As a result of the above factors, income before income taxes decreased
by $17,585,000 in 1995. The Company's provisions for income taxes are impacted
by the mix between domestic and foreign earnings and vary from the U.S. Federal
statutory rate principally due to the impact of foreign operations and certain
losses for which there is no current tax benefit.
CAPITAL RESOURCES AND LIQUIDITY
The Company's consolidated working capital at June 30, 1995 and
December 31, 1994 was $77,833,000 and $66,294,000, respectively.
Operations for the six month periods ended June 30, 1995 and 1994,
after adding back non-cash items, provided cash of $9,991,000 and $24,454,000,
respectively. During such periods other changes in working capital used cash
of $16,180,000 and $1,201,000, respectively, resulting in net cash being
provided (used) by operating activities and working capital management of
$(6,189,000) and $23,253,000, respectively.
Investment activities during the six month periods ended June 30, 1995
and 1994 provided (used) cash of $95,507,000 and ($123,371,000), respectively.
Such amounts include additions to property, plant and equipment in 1995 and
1994 of $25,810,000 and $43,191,000, respectively, purchases of marketable
securities and short-term investments of $4,339,000 and $103,829,000,
respectively, and sales of marketable securities and other short-term
investments of $130,488,000 and $23,790,000, respectively. The 1995 and 1994
property additions principally relate to (i) the construction of the K3 plant,
(ii) the replacement of the HCL production unit damaged in the fire in
February, 1994 and (iii) the construction of a potassium carbonate
manufacturing facility (see "Capital Expenditures" below). The 1994 purchases
and the 1995 sales of marketable securities and other short-term investments
principally relate to the purchase in 1994 and the liquidation in 1995 of the
pledged certificates of deposit ("CD's") described below.
11
<PAGE> 12
Financing activities during the six month periods ended June 30, 1995
and 1994 provided (used) cash of ($74,836,000) and $133,030,000 respectively,
(principally relating to the increase of certain long-term debt in 1994 and the
prepayment of such debt in 1995, which is described below) .
On June 30, 1994, the Company entered into the Loan Agreement with a
bank and borrowed $40,000,000 (repayable quarterly over a four year period) and
utilized a portion of the proceeds to prepay approximately $19,000,000 then
owed to such bank. Pursuant to the Loan Agreement, the Company also borrowed
an additional $100,000,000, repayable in January, 1996. Under certain
specified circumstances prior to such date, the Company could have converted
such loan into a term loan maturing five years from the date of conversion. The
Company pledged CD's with an aggregate principal amount of $100,000,000 as
collateral for such loan (such CD's are included in "other current assets" in
the accompanying December 31, 1994 Consolidated Balance Sheet). On January 5,
1995, the Company liquidated the pledged CD's and prepaid the $100,000,000
loan.
As of June 30, 1995, the Company had outstanding long-term debt
(excluding current maturities) of $284,966,000. The Company's primary source
of liquidity is cash flow generated from operations and certain revolving loan
commitments.
Approximately 90% of HCL's sales are made outside of Israel in various
currencies, of which approximately 34% are in U.S. dollars, with the remainder
principally in Western European currencies. In order to mitigate the impact of
currency fluctuations against the U.S. dollar, the Company has a policy of
hedging a significant portion of its foreign sales denominated in Western
European currencies by entering into forward exchange contracts. A portion of
these contracts qualify as hedges pursuant to Statement of Financial Accounting
Standards No. 52 and accordingly, unrealized gains and losses arising therefrom
are deferred and accounted for in the subsequent year as part of sales.
Unrealized gains and losses for the remainder of the forward exchange contracts
are recognized in income currently. If the Company had not followed such a
policy of entering into forward exchange contracts in order to hedge its
foreign sales, and instead recognized income based on the then prevailing
foreign currency rates, the Company's income before income taxes for
12
<PAGE> 13
the six month periods ended June 30, 1995 and 1994 would have increased by
approximately $8,600,000 and $6,600,000, respectively.
The principal purpose of the Company's hedging program (which is for
other than trading purposes) is to mitigate the impact of fluctuations against
the U.S. dollar, as well as to protect against significant adverse changes in
exchange rates. Accordingly, the gains and losses recognized relating to the
hedging program in any particular period and the impact on revenues had the
Company not had such a program are not necessarily indicative of its
effectiveness.
CAPITAL EXPENDITURES
During 1995 (excluding the K3 Plant and the reconstruction of the HCL
production unit damaged by fire in February 1994) the Company invested
approximately $11,000,000 in capital expenditures. During 1993 the Company
commenced construction of a new facility in Israel ("the K3 Plant"), with
initial capacity to produce approximately 100,000 metric tons of potassium
nitrate annually. The Company has recently completed the construction of the
K3 Plant and the reconstruction of the damaged HCL production unit.
The total costs incurred in connection with the construction of the K3
plant was approximately $100,000,000. Since the Company has received
approximately $34,000,000 in Israeli Government grants related to the K3 plant,
the Company's accompanying balance sheet includes the K3 plant at a cost, net
of grants, of approximately $66,000,000.
The Company currently anticipates that capital expenditures for the
year ending December 31, 1995 (excluding the K3 Plant and the reconstruction of
the damaged production unit) will aggregate approximately $19,000,000. The
Company's capital expenditures will be used primarily for increasing certain
production capacity and efficiency, product diversification, safety and for
ecological matters. The Company expects to be able to finance its capital
expenditures from internally generated funds, borrowings from traditional
lending sources and, where applicable, Israeli Government grants and
entitlements.
INFLATION
Inasmuch as only approximately $40,000,000 of HCL's annual operating
costs are denominated in New Israeli Shekels ("NIS"), HCL is exposed to
inflation in Israel to a limited extent. The combination of price
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<PAGE> 14
increases coupled with devaluation of the NIS have in the past generally
enabled HCL to avoid a material adverse impact from inflation in Israel.
However, HCL's earnings could increase or decrease to the extent that the rate
of future NIS devaluation differs from the rate of Israeli inflation. For the
years ended December 31, 1993 and 1994, the inflation rate of the NIS as
compared to the U.S. Dollar exceeded the devaluation rate in Israel by 3.2% and
13.4%, respectively.
ENVIRONMENTAL MATTERS
See Item 1 - "Business - Environmental Matters" and Note N of Notes to
Consolidated Financial Statements included in the Company's Form 10-K for
information regarding environmental matters relating to the Company's various
facilities.
14
<PAGE> 15
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter for which
this report is filed.
15
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Form 10-Q
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.
TRANS-RESOURCES, INC.
---------------------
(Registrant)
Date: August 11, 1995
Lester W. Youner
-----------------------------
Vice President, Treasurer and
Chief Financial Officer
16
<PAGE> 17
TRANS-RESOURCES, INC.
INDEX TO EXHIBITS
Exhibit Description Page No.
27 Financial Data Schedule. 18
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
TRANS-RESOURCES, INC.
Financial Data Schedule
Article 5 of Regulation S-X
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 30,053
<SECURITIES> 0
<RECEIVABLES> 77,583
<ALLOWANCES> 0
<INVENTORY> 51,607
<CURRENT-ASSETS> 218,457
<PP&E> 339,313
<DEPRECIATION> 118,684
<TOTAL-ASSETS> 469,961
<CURRENT-LIABILITIES> 140,624
<BONDS> 284,966
<COMMON> 0
0
7,960
<OTHER-SE> 9,789
<TOTAL-LIABILITY-AND-EQUITY> 469,961
<SALES> 199,731
<TOTAL-REVENUES> 199,731
<CGS> 166,973
<TOTAL-COSTS> 166,973
<OTHER-EXPENSES> 20,213
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,746
<INCOME-PRETAX> (178)
<INCOME-TAX> 2,073
<INCOME-CONTINUING> (2,251)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,251)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
